Recycling....gives you a bigger winkie!

Mea culpa! Should have put this link up before, so loyal fans can do what loyal fans SHOULD do. (Podcast here, for the listening public)

A bonus: one kind reader, the fine folk at Am Econ & Curmud, linked the podcast and the essay. Thanks!

But, thanks even more for having Google Ads on your site.

Since the post was about (as far as Google could tell) recycling, the ad they put up was about recycling! And if you click through, it contains this gem:

Clean Up the Way You Recycle
With an ecopod in your home or office, you will change the way you recycle. Place aluminum cans and plastic bottles into the top and step on the easy-step compaction system to store 50 or more containers. Place glass and other recyclables inside the top bins and you'lll benefit from clean effective recycling that your friends will admire. Order your ecopod today!

Presumably, this kind of exchange takes place, daily:

"Say, Alfred, isn't your penis bigger since you started recycling? I really ADMIRE that!"

"Why, yes, Trip, it is. Thanks for noticing! It's all due to my new ecopod!"

Notice the reason you should get an ecopod. It doesn't say you can make money, save space. It just say, "your friends will admire" you. Wow. Just wow.

To Find Monopoly, Count the Number of Firms

Preach, Don. Preach it.

As an old FTC hand myself, I find most antitrust "policy" remarkable.

The Sherman Act is just fine, if interpreted narrowly. But interpreting the Sherman Act narrowly requires interpreting the definition of "industry" broadly.

When I was at the FTC, my old friend Mike Smirlock proposed to me a definition of monopoly, or monopolize, as used in the Sherman Act.

1. ASSUME THE MERGER TAKES PLACE.
2. Define the industry. Include close substitutes in the defintion of "industry."
3. Now, rank the firms in the industry (post-merger) from largest to smallest.
4. Starting with the largest, count the number of firms in the industry.
5. If the number is "1", the industry is a monopoly, and the merger should not be allowed.
6. If the number is "more than 1," the industry is NOT a monopoly, and the merger SHOULD be allowed.

The good Boudreaux makes a persuasive argument for why THIS merger should go through. ATSRTWT, please.

But I think the Smirlock test is the one we should use. The considerations raised by Don B only arise because we are doing something else.

For enthusiasts, I give you the Sherman Act, the only anti-monopoly legislation you will ever need:

Section 1. Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

Section 2. Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

The other sections, which are either obselete, purely technical, or (IMHO) shaky, can be found here.

(I should note that my own view is quite centrist, compared to that of my good friend Gary Hull. Check this out!)

Solow on Growth: A Retrospective

From Robert Solow's Nobel Address, in Stockholm, 1987:

The "neoclassical model of economic growth" started a small industry. It stimulated hundreds of theoretical and empirical articles by other economists. It very quickly found its way into textbooks and into the fund of common knowledge of the profession. Indeed that is what allows me to think that I am a respectable person to be giving this lecture today. Nevertheless I must summarize the outcome in a couple of sentences, so that I can move on to the more interesting questions about what is still unknown or uncertain and remains to be found out.

Just allowing for a reasonable degree of technological flexibility accomplished two things. In the first place, the mere existence of a feasible path of steady growth turned out not to be a singular event. A range of steady states is possible, and the range may even be quite wide if the range of aggregative factor-intensities is wide. There are other ways in which an economy can adapt to the Harrod-Domar condition, but it still seems to me that variation in capital-intensity is probably the most important.

Secondly, it turned out to be an implication of diminishing returns that the equilibrium rate of growth is not only not proportional to the saving (investment) rate, but is independent of the saving (investment) rate. A developing economy that succeeds in permanently increasing its saving (investment) rate will have a higher level of output than if it had not done so, and must therefore grow faster for a while. But it will not achieve a permanently higher rate of growth of output. More precisely: the permanent rate of growth of output per unit of labor input is independent of the saving (investment) rate and depends entirely on the rate of technological progress in the broadest sense. (emphasis mine)

Technological progress is a problem. They don't sell it in boxes. Policies designed to focus on saving, or consumption, don't accomplish much, except to keep politicians and pundits in business ("Vote for me, folks, and you'll soon be farting through silk!!")

Hard for politicians to admit, "The best thing we could do is create a setting where innovation flourishes, and is rewarded, and get the hell out of the way!" Even the word, "progress," has been stolen by those Luddites who call themselves "Progressives" but who in fact try to protect industry and hold back economic change. "Progress" is not building roads. Progress is individual humans thinking of new ways to use roads, and new products to move along those roads.

I am excerpting Solow, of course. Much of his real view has to do with stimulating effective demand, Malinvaud's famous theory of disequilibrium. But I do have to give Solow some credit for the way he concluded. A nearly Austrian riff, though he seems to approve:

When I read Robert Frost's lines from "The Black Cottage":

Most of the change we think we see in life
is due to truths being in and out of favor

it occurred to me at once that they sound altogether too much like economics. Some of that feeling is inevitable, and not necessarily to be regretted. The permanent substructure of applicable economics can not be too very large because social institutions and social norms evolve, and the characteristics of economic behavior will surely evolve with them. I believe also that part of the changeability of economic ideas on a shorter time-scale is our own doing. It comes from trying too hard, pushing too far, asking ever more refined questions of limited data, over-fitting our models and over-interpreting the results. This, too, is probably inevitable and not especially to be regretted. You never know if you have gone as far as you can until you try to go further.

Mahale Mountain Breakdown

If all has gone well on our OKC - Newark - Amsterdam - Kilimanjaro flights, today Robin and I will be in Mahale Mountains National Park in Tanzania, on the shore of lake Tanganyika. There are a few hundred wild chimps here that are habituated to humans and we are gonna go follow them around as best we can.

Also, lake Tanganyika is touted to be clean and good for snorkeling.

This area is fairly remote, the left hand photo shows an aerial view. Supposedly there are no roads in our out; the only access being by boat.


Here is a link to a video of chimps at Mahale (warning, video is pretty over the top pretentious). After this we are headed to the Serengeti to see the great migration.
(Transmitted remotely, from Angus in Tanzania)

Is This So Wrong?

Dancing garbage, some big green furry things, and delightful 25 year old Japanese women doing the whole "schoolgirls in white dresses" that Japanese men seem to like so much.

I'd recycle for them. The women, not the green things. The green things are holding pieces of paper that actually can't be recycled. Maybe composted. Maybe that is what they were going for.

Have to admit, I didn't pay that much attention to the green things. Quite taken by the schoolgirls, though. In a paternal, sort of observer way, of course.

(Nod to BH, who found it)

I gotta Jones for keeping up wid da Joneses

Some of you may have seen this when it came out, two years ago. I missed it, so I bring it to you now.

From the QJE, August 2005, Vol. 120, No. 3, Pages 963-1002....(Luttmer's personal link to a PDF of the paper)

"Neighbors as Negatives: Relative Earnings and Well-Being," Erzo F. P. Luttmer,

Abstract:
This paper investigates whether individuals feel worse off when others around them earn more. In other words, do people care about relative position, and does "lagging behind the Joneses" diminish well-being? To answer this question, I match individual-level data containing various indicators of well-being to information about local average earnings. I find that, controlling for an individual's own income, higher earnings of neighbors are associated with lower levels of self-reported happiness. The data's panel nature and rich set of measures of well-being and behavior indicate that this association is not driven by selection or by changes in the way people define happiness. There is suggestive evidence that the negative effect of increases in neighbors' earnings on own well-being is most likely caused by interpersonal preferences, that is, people having utility functions that depend on relative consumption in addition to absolute consumption.

This is an old problem, but the empirical work is quite interesting. Here's the problem: consider two societies.....each has exactly two classes of people, the numerous poor and small number of rich. Assume also that the numbers, and proportions, are identical in the two societies. The two are:

Society Alpha, where the poor receive $20k income per year, and the rich receive $40k income per year.

Society Beta, where the poor receive $25k income per year, and the rich receive $120k income per year.

Society Beta is better, right? First, by the Pareto criterion, EVERYONE is better off in Beta than in Alpha. Second, one could always redistribute, and take some from the rich in Beta, and make the poor even better off.

This paper would seem to raise questions about the first claim. Pareto comparisons based on wealth have nothing to do with welfare. The poor in Beta are MUCH worse off, because the disparity between rich and poor is greater. And there may be no means of redistributing enough to make this difference go away, unless you do away with the rich entirely.

Oh, society of frailty, thy name is growth.

(Nod to KL, who actually believes in redistribution, but isn't envious of the rich. At least not much)

Wimbledon Update

Finally a dry day for the backlogged mess that is Wimbledon and some very strange results:

Justine Henin wins the first set 6-1 but then eventually loses to Marion Bartoli of France.

Andy Roddick wins the first two sets and is up a break in the third but then eventually loses to Richard Gasquet of France.

This next result is a bit more understandable as it involves a "dangerous floater" and isn't such a major choke job as the first two, but Anna Ivanovic (the 6th seed) loses 2-6, 4-6 to Venus Williams (23rd seed).

So the women's final will be Venus Williams v. Bartoli. Gotta like Venus to uphold my pick that a Williams sister will win this year.

Men's semis are going to be Federer v. Gasquet and Djokovic v. Nadal. Djokovic has played back to back marathon matches, Gasquet went to 8-6 in the fifth set today, Nadal at least had an easy match today, Federer has only played one match in the last 5 days. I think its going to be a rematch of the French final and I can only hope the same outcome will prevail.

Goin' to Arusha

No it's not a new song by the Mountain Goats, its the first leg of our upcoming vacation itinerary.

Last year the Economist named Tanzania "The country that deserves the money it gets" in an article entitled "Bye-Bye Poverty" which says in part:

Tanzania's relative lack of graft means that some donors now put their money directly into the national budget with few strings attached. Britain hopes to deposit $170m a year into Tanzania's coffers in this way for the next few years

While this may help dilute colonial guilt in Blighty (Tanzania was a British colony from 1919 till independence), I respectfully submit that government to government transfers will never bring about development.

Rather, I believe they will mainly bring about a long lived recipient government. And indeed, Tanzania has been a one party state since independence, namely the CCM party founded by Julius Nyerere, the leader of their independence movement.

The Check was in the Mail

In a series of recent papers, Micheal Dooley, Peter Garber, and David Folkerts-Landau have been arguing against the textbook open economy macro model (and said model's dire predictions about the current set of global financial accounting imbalances). They argue that since Sovereign debt is not really collectible, poor countries must post effective collateral to get financial flows from rich countries. They further argue that past exports as represented by the US current account deficit are precisely this collateral.

In other words, China has given us a ton of stuff in exchange for t-bills. If they expropriate US or other rich country FDI, the US cancels their claim to the t-bills and we get the stuff for free. That is to say, China's huge reserve holding of dollars is just collateral against any appropriation of the FDI being done there.

Here is how they put it in their latest NBER working paper (gated, sorry):

The nature of the social collateral is so obvious it is hard to see. If the center cannot seize goods or services after a default, it has to import the goods and services before the default and create a net liability. If the periphery then defaults on its half of the implicit contract, the center can simply default on its gross liability and keep the collateral. The periphery's current account suplus provides the collateral to support the financial intermediation that is at the heart of development strategies. The interest paid on the net position is nothing more than the usual risk-free interest paid on collateral.

This is really cool.

Finally, a link to other Dooley et al papers on this topic along with criticisms of their approach is here.

UPDATE: Interesting comment over on Marginal Revolution, on this topic....

There's a practical problem with canceling China's dollar assets: The enormous secondary market in T-bills means that China can easily sell them to some third party who could redeem them at face value. I can't think of any way to close this loophole without effectively shutting down all trade in T-bills, which has enormous negative consequences for the U.S.

Sounds right, and raises an interesting problem. Even if sold at a discount, a quantity of t-bills that large might well drive prices down, and therefore raise interest rates a LOT at the next auction. Good point, Ammianus.

UPDATE II: A correction, from Belligerati. So, never mind on the secondary market way out. Angus was right all along.

Another nice round number

KPC recently reported on China muscling the World Bank out of reporting on the extremity of the pollution situation there. However, in 13 months the world will descend on China for the 2008 summer Olympics and its hard to imagine the Chinese government being able to keep a lid on each and every reporter (though if anyone can, they can!).

It looks like they have a plan B though: banish a few autos from the streets during the games. Check out the story here: Beijing to ban a million cars in clean air test.

I wonder how long these guys can continue to get away with playing the shell game on us.

Grumpy old men

Why do past icons often age so ungracefully? Jack Nicklaus for example takes the fact that Tiger Woods is on a faster winning pace than his to to be clear evidence that Tiger's rivals are somehow lesser than Jack's rivals. Also there is the constant sniffling about the "equipment".

Now Pete Sampras joins the club as summarized by Harvey Aarton in the NY times article: Sampras Jabs a Finger in Federer’s Eye. Sampras seems to be saying that everyone is a wussy boy playing into Federer's hands by not serving and volleying on the grass.

“If there is anything Roger doesn’t like to see, it is someone coming in and serving and volleying, someone putting pressure on him,” Sampras said. “I think my game matched up reasonably well against his.”

Now it is weird for an old-timer like me to see the grass all burned out on the baseline and lush and green up by the net at Wimbledon. Its kind of a photo negative of the old days. However perhaps Pete has forgotten that in his next-to-last Wimbledon (his last one was a second round loss to the immortal Georg Bastl), a pre-prime Federer beat him (and yes Pete was playing serve and volley tennis).

I am guessing Pete sees his most majors won position going down the tubes and isn't real happy about it.

Now I am about three orders of magnitude away from icon status at least, but Robin is under standing orders to smother me with a pillow if I start complaining about how new equipment has made publishing too easy for the youngsters. So far the worst I've done is tell my econometrics class how when I started out we had to use punch cards and could basically only run two (simple) programs a day.

Mahmoud Ahmadinejad is a lot smarter than I thought

New evidence comes from this AP Story reporting that the Iranian president has turned down Oliver Stone's request to make a movie about him (without even taking a meeting with Oliver)!

Does anyone else wonder if he is just holding out for Michael Moore??

Hey I thought the World Bank was OUR Puppet

But from the Financial Times comes the story that the Chinese government engineered the removal of nearly a third of a World Bank report on pollution in China because of concerns that its findings on premature deaths could provoke "social unrest".

The article says that pre-censoring, the WB report claimed that about 750,000 people die prematurely in China each year, mainly from air pollution in large cities.

And apparently I've been hiding under a rock somewhere because the FT article takes as an already given fact that sixteen of the world's 20 most polluted cities are in China

To me, this has implications for several issues.

First, it seems like China is in trouble. While their reported growth rates have been spectacular, they still have a very very long way to go to catch the up to the developed countries and it seems like the country will be a smoking cinder long before they do.

Second, man the WB is full of wusses!!

Third, doesn't this kind of potential environmental meltdown have to factor into any analysis of our trading relations with China? Yes we get cheap poison dogfood and all, but aren't these pollution costs in some way relevant too?

Life imitates Art

(click the graphic for a readably sized version)

Like V2 bombs and Tyrone Slothrop, the island nation of São Tomé has gotten things slightly out of order. In particular, even though no oil has been actually produced (Chevron drilled but came up dry), they already have a full blown oil corruption scandal in the works. Its a good one too with a dirty US congressman (William Jefferson), global crusader Jeffery Sachs, and a Texas firm fronted by a pal of Ousegun Obasanjo, the ex-ruler of Nigeria.

Seems more like BrokenViews.com to me

Speaking of anniversaries, we are also at the 10th birthday of the 1997 Asian Financial Crisis. Today's WSJ provides bewildering commentary on the lessons of the crisis from a site called breakingviews.com.

According to them, one important lesson that the US learned from the crisis is "Don't borrow in foreign currency. The US borrows almost exclusively in dollars." Um, excuse me but did the US not know this before the summer of 1997? Is there a major break in the time series of "foreign denominated borrowing by the US government" at that time? Does such a time series even exist? The article gives no data at all to support what to me is a risible claim.

We are also told that emerging markets learned "one big thing" from the crisis, namely "Don't rely on fickle overseas funds". The evidence? "Rather than borrowing, the Asians are now accumulating dollars. Indonesia and Malaysia, two of the crisis countries a decade ago are running trade surpluses of more than 10% of GDP." Sorry, but countries do not directly choose the size of their foreign inflows, unless they impose strict capital controls which none of these guys have done (though the closest to doing so was Malaysia). Current/Capital account outcomes are produced by a combination of the relative productivity of a nation's firms, the relative attractiveness of a nation's markets to foreign investment, and the relative economic policies of the country (though this last factor really can be subsumed into the first two).

It is incredibly simplistic to point to a current account number and claim to be able to say exactly what forces have produced it. One would need to produce evidence that Asian governments are undertaking even more export friendly policies than they did pre-1997 or show that they are actively refusing / discouraging foreign investment funds (a lot of them, not just Malaysia).

In other words, at the level of evidence being considered, one could just as easily say that foreign investors learned one big thing from the crisis, namely not to throw money at fickle emerging markets.

Good News from Mexico: Democracy is working

Its been a year since the ultraclose Mexican Presidential election installed Felipe Calderón in Los Pinos and AMLO (Andres Manuel Lopez Obrador, aka Peje) in the Zócolo protesting. At the time prospects were not good for the second post-PRI presidency. Calderon seemed defensive and not dynamic and the charismatic Peje was promising to overturn the election and/or run a shadow government.

AMLO is still out there plugging his new book (La Mafia nos robó la Presidencia) and trying to rally the faithful, but it is no longer working. Calderon has been able to work with the Congress in a way his predecessor Vicente Fox never could and enjoys a 65% popularity rating, while many of Peje's erstwhile supporters say that if they had it to do over again, they would not vote for him.

In 2000, Vicente Fox's election made Mexico a real Democracy and the 2006 election has helped that new Democracy mature. This is good news from south of the border.

Upon further review.....

.....my pick of Safin to upset Federer was a bit off as the listless underachiever Safin turned out to be the personality inhabiting the body that day. However, undaunted, I offer up this pick for the women's side: a Williams. Serena is closing in on another match-up with the lil cheater Henin and Venus is heading towards Sharapova. I favor Serena but think it'll be one or the other hoisting the big plate next Sunday.

It probably worth pointing out that these two and Laura Granville are the only Americans left in the women's draw and Andy Roddick (aka Roger Federer's proverbial rented mule) is the only American man left. Right now, Serbia is a greater tennis power than the USA and I blame George Bush for that! On the bright side, its an improvement over the French Open for American tennis as there Serena was the only American to make it out of the third round.

On the men's side, I'll take the field over Federer but that is just out of spite.

Development: Yer doin' it Wrong**, example #101

From the department of Doh!! comes this story: Nigerian school without power receives 300 laptops

"We have been browsing the Internet and we are very happy", Juliet Onah, an excited primary six pupil, was quoted as saying. But she said powering the laptop remained difficult as the school had no electricity and the supply at home was irregular.

No further comment is really necessary is it?

** see some others who are doing it wrong here

Well thats a load off my mind!

Former astronaut Lisa Nowak didn't wear diapers during her 950-mile road trip to confront a romantic rival, her lawyer said Friday, disputing one of the more bizarre details to emerge from the NASA love triangle.

"The biggest lie in this preposterous tale that has been told is that my client drove from Houston, Texas, to Orlando, Florida, nonstop, wearing a diaper," Donald Lykkebak said. "That is an absolute fabrication."

You cannot be serious!!

In the "loser who needs to get over himself category", I hereby nominate one Isaiah Washington.

Apparently there is a TV show called Grey's Anatomy that Isaiah was recently fired from after almost coming to blows with another cast member and referring to yet another cast member with an anti-gay slur, which he then repeated later at an awards show.

However, in Mr. Washington's ego addled universe here is how he sees things:

"Maybe for 50 years and the history of media and television I represent something that's supposed to not exist...This happened to Malcolm X, this happened to Paul Robeson -- this misconception can happen to any man of power that loves himself and wants to spread that love and that humanity throughout the world."

Say What???????

Was Malcolm X the star of "Malcolm in the Middle"??

Paul Robeson basically broke the color bar at Rutgers University and crusaded against lynching, before he fell in love with Uncle Joe Stalin.

Have a good weekend people, don't forget to spread that love!!

A Nice Round Number

In a recent post I questioned whether African development problems stemmed largely from a lack of foreign aid. I asked "haven't untold billions of dollars been send in aid and debt relief?"

Well, untold billions is pretty fuzzy even for me, so I asked the redoubtable Bill Easterly if he perhaps knew how much aid had gone to Africa.

Here is what he told me: "Total net aid (including concessional loans net of repayment and debt relief) to Africa from 1960 to 2005 is about $600 billion in 2005 dollars. This is a figure I have calculated myself recently from World Bank World Development Indicators and OECD figures."

So there you have it people, after $600 billion has gone in with (in my view at least) precious little to show for it, J. Sachs is still advocating large increases in aid as the solution and casting aspersions on anyone who might beg to differ.

I still beg to differ.

He Had the Receipt! Is there a PROBLEM, Officer?

Plus tax, of course. $4.88 + tax.

Man pays $4.88 for plasma TV at Wal-Mart Fri Jun 29, 7:46 AM ET

While Wal-Mart is known for dropping its prices, one West Monroe (KPC: That's in LOOOsiana, for you Yankees) man took the ad campaign seriously when he dropped the price of a plasma television from $984 to $4.88. Police arrested Chandon L. Simms, 23, on Tuesday at the retail store on a charge of felony theft.

According to police reports, Simms carried a 42-inch Sanyo Plasma TV to a self-checkout aisle after switching the original price tag of $984 with one for only $4.88. Wal-Mart Loss Prevention officers witnessed the alleged transaction and called police.

When the store officers stopped Simms on his way out the door, he produced a receipt for a television purchased at the West Monroe Wal-Mart, authorities said.

Simms told officers that he purchased a TV from the West Monroe store and planned to returrn that one and keep the one he purchased for only $4.88 from the Monroe store. He was then arrested and booked into the Ouachita Correctional Center.

Information from: The News-Star, through Yahoo

He thought he would get away with it, because he was going through the self-checkout? With a four foot long box that said, "Plasma TV"? Wow.

Story Blows Up Like A Tater in the Microwave

This story will not die.

In fact, the followups show it has legs. If a potato could have legs. Eyes?

Lots more background here, in the Bay City Times

Angus has already pointed out the conflict of interest that lies at the heart of this controversy. But the BCT is still working on that angle:

The first runner-up, Katie Smrecak, will serve as the Potato Queen until a new queen is chosen next month. Smrecak is the daughter of Don Smrecak, chairman of the Munger Potato Festival.

Don Smrecak and Katie Smrecak could not be reached by The Times, and her family declined to comment.

But here is the important new development. Please join!

But for Nowicki's family and friends - and even some strangers - she still reigns as the Potato Queen.

A group on Facebook.com titled ''ALLISON NOWICKI IS THE REAL MUNGER POTATO QUEEN'' was created by Nowicki's sister, Jennifer Nowicki, last week. There are about 25 members so far. Nowicki said she was flattered to find some group members who showed support were people she didn't know.

The Potato Queen preceding Nowicki, KayCe Caban, sympathizes with her as well.

''I know when I was queen, there was a lot of drama ... because I could also not do a lot of parades,'' said Caban, who now lives in Ocean City, Miss. ''It's a popularity contest. A lot of people were upset that I won, and I think that a lot of people were upset that she won. I'm just shocked that they would do that, especially so close to the end of her reign.''

Linda Jenkins, an Essexville resident, was the first runner-up for Potato Queen in 1973 and said she filled in for the queen for several parades and even crowned the new Potato Queen.

''My understanding is the first runner-up did step in when the queen wasn't available,'' Jenkins said. ''As first runner-up, I had a ball. I got to be in the parades ... I got to wear a sash - nobody knew the difference.''

Down goes Dubya

Immigration reform is dead and this time its for real. Besides reflecting on Bush's complete lack of clout with his party's dwindling congressional delegations (only 12 out of 49 Republican senators were with him), and speculating on his noble obsession with this issue, it is worth thinking about what happens next.

From my point of view, the status quo is preferable to the type of bill that would attract the votes of 61 Senators. Perhaps Congress could try some small ball and address raising the number of work visas available for skilled immigrants (the current H1B limit is 65,000 per year and they go faster than tickets to the Police reunion tour).

Far be it from me to give political advice to the Republican party, but anti-immigration does not seem to be a huge vote winning platform item. Perhaps a Democratic majority will pass a better bill in 2009?

Marat Safin, International man of mystery

Wimbledon is starting to get good. We are one more win each away from Sharapova vs. Venus Willams, Tim Henman is out so tv time and center court are both freed up for actual professional players and in the morning (if the Oklahoma-esque London weather allows), Marat Safin will play Roger Federer.

Safin is a brooding, enigmatic, freakishly talented, impish, underachieving tennis genius and I am predicting he pulls a big upset and takes out the robotically perfect Swiss star Federer, winner of the last 4 Wimbledons.

I know, I know, but I'm a kid with a dream.

ps. Rafael Nadal, last year's finals loser had this piercing analysis of the All-England Championships:

"The grass don't change," Nadal said Tuesday after beating Mardy Fish of the United States 6-3, 7-6 (4), 6-3 in the first round. "Always is grass."

I Still Don't Get It

So the blockbuster 3-way trade sending Kevin Garnett to Phoenix, Amare Stoudemire to Atlanta and the #3 and #11 picks in the draft (plus two bums) to Minnesota didn't go through after all. Ah, Steve Kerr came to his senses you say, or Kevin McHale thought better of it. No, apparently it died because ATLANTA DECIDED AGAINST IT!!! That's right, the only team clearly getting a big net gain nixed the deal. Wow. I would love to be an NBA GM.

Scots wa hae*

Yes, my native land is in the news.

Gordon Brown takes over as PM of the UK. Glasgow born and Edinburgh educated, Brown is in many ways the anti-Blair. The Wall Street Journal has an incredibly smarmy and condescending profile of Brown on its editorial page today entitled, "So Who's this Gordon Brown Anyway".

Among the gems: "If he is having a bad time, big Gordon has a job disguising it. His purple lips start to pout. He begins to pull at his dark pepper-and-salt fringe, or at least he did until he recently had it shampooed and trimmed."

Wow and then there is this: in public he is a bundle of anxiety who thinks he must crush all resistance. His jaw juts when he speaks and he has a smallish repertoire of jokes. At a lectern he does not swagger or casually survey the throng. He pats his script repeatedly with two hands the fingernails of which are bitten to bleeding remnants. Not even the most skilled Manhattan manicurist could salvage those nails.

This has got to be an all time low, even for the WS Journal editorial page. I guess they are practicing up for eight years of Hillary bashing!

*if the title seems overly weird look here

Tootin' the Sachs-o-phone

Erstwhile economist and current development messiah Jeffery Sachs is again instructing us how to solve Africa's problems.

He tells us: "Africa will be the bank's test under incoming President Robert Zoellick. If it fails there, not only Africa but the bank will be in mortal peril."

Well I am just a dumb Okie, but Africa has been the World Bank's test since McNamara was president and the BANK HAS COMPLETELY, UTTERLY, AND IRREVOCABLY FAILED the test.

I think for the overwhelming majority of the Bank employees, the mission of the bank is to continue to secure rich nation funding, employment and pay raises (note that employment and pay raises are a universally common goal of workers everywhere, I am not necessarily faulting Bank employees here at all).

Sachs rightly decries the lack of accountability for results that the World Bank has enjoyed for 60 years and counting now: Yet the bank's managers have not been held accountable. Senior bank officials actually whisper to African leaders not to dream about achieving the (millenium development) goals, since the managers don't want to be responsible for ambitious targets. They hope that the goals will just fade away.

Even after saying all that, though, Sachs seems to indicate believe that somehow by hearing the sound of his voice the Bank can magically change and become an effective tool for development. Its actually pretty easy, they just gotta get more resources and do what he says with them.

Sachs comes incredibly close to giving African governments a free pass for their plight and putting the blame squarely on one George Bush and his "free market ideologue" pals.

Seasoned practitioners not held back by ideology and posturing know how rapidly results can be achieved.

and

Yet when it comes to Africa, according to Washington's free-market ideologues, all those wonderful things (infrastructure) are supposed to spring up by themselves, with markets coming to the rescue. And when those things don't arrive, since there is no way to pay for them, African governments are blamed for corruption.

Wow. I mean, WOW!! Has Africa gotten no development aid before? Haven't untold billions of dollars been sent in aid and debt relief? Is the problem of Africa really not enough aid?

One more bar: And the core problem in Africa is not corruption but the lack of basic infrastructure and services.

Isn't there possibly a connection there? Just maybe?

Look, I agree with Sachs (and I greatly admire his commitment and passion) that corruption isn't the only, or even main, problem in Africa. But it is a significant problem.

I think that more broadly "governance" is the main problem in Africa, and all the aid in the world won't fix that. The solution is ultimately internal, not external.

I don't get it

Timberwolves talking three-way Garnett deal:

Minnesota Timberwolves forward Kevin Garnett is close to going to the Phoenix Suns in a monumental three-way trade that would send Phoenix forward Amare Stoudemire to the Atlanta Hawks, league sources said Wednesday.

Atlanta would move the Nos. 3 and 11 picks in Thursday's draft, as well as Zaza Pachulia and Anthony Johnson, to Minnesota.

Minnesota owner Glen Taylor has delivered a mandate to his basketball executives to get a deal done, one league executive said.

Bear with me people because its gonna take old Angus a while to break this one down for you. I'm not sure which part is crazier.

Kevin Garnett, 31 years old had the following stat line last year: 22.4 ppg (on 48% shooting), 12.8 rebounds, 4.1 assists. His career numbers are 20.5 (49%), 11.4 and 4.5 so even though he came to the league out of high school and has a lot of miles on him, he hasn't really slipped. He is going and the T-Wolves are getting two draft picks neither of which is Oden or Durant and two bums??

Phoenix is willing to give up Amare Stoudemire at 24 years of age and seemingly fully recovered from his microfracture surgery for the 31 year old Garnett? Here's Amare's stat line from last year: 20.4 ppg (at 57% shooting), 9.6 rebounds playing about 6 and a half minutes per game less than Garnett (he has virtually no assists, but then again, he's got Steve Nash).

I wouldn't do this if I were Phoenix, nor would I do it if I were Minnesota. And, if I were Minnesota, why wouldn't I trade Garnett heads up for Stoudemire (allowing for whatever juggling the cap rules require to make it work)?

Does Phoenix think this is Nash's last good year coming up but Amare won't peak for two or three more so they'll never be in synch for a championship?


What is it about Amare Stoudemire that I don't know? He's really 50? He's a bad teammate? Is a tattoo that says "Black Jesus" really THAT objectionable?

Tyler? Matt? Help me out here.

ps. if this goes through, I hope Emory University, Mercer University, Agnes Scott College, or Georgia Tech are hiring next year.

OKC, the Seattle of the Great Plains!!

From an AP wire story

In Oklahoma, about 20 firefighters had to use a raft to rescue 16-year-old twin sisters from their car, stalled in rushing bumper-deep water Tuesday.

The Oklahoma City area received about an inch of rain in 24 hours, bringing the city's annual total to 28.03 inches — about 10 inches above normal. Flooding closed some roads Wednesday in central and northeastern Oklahoma.

There are 10" wide mushroom caps growing in my backyard, people. We are gonna have to change "where the wind comes whistling down the range" to "where the rain comes running down your back" or something. Its like Ireland around here.

Munger Potato Queen: BAGGED!

Since we have been doing the Michigan thing here at KPC, I have to note that there is a scandal in Munger, MI: The "Potato Queen" has been called out and bagged. Her offense? She did not attend the Munger Potato festival events in the off-season.

Not just ANYONE gets to be queen. It takes dedication, and energy. You can't be one of those couch potatoes, and be Potato Queen, Allison Nowicki. You betrayed the public trust, and you had to be mashed.

BUT WAIT: Allison Nowicki fights back! Apparently it was just a misunderstanding. The accusation of holding back on the spud circuit?

Not so, says Nowicki, who appeared at the Miss Bay County Pageant, St. Johns Mint Festival, Bay County Fair, Montrose Blueberry Festival and Linwood Pickle Festival.

"The only one I missed was the (Bay City) St. Patrick's Day Parade," Nowicki, a sophomore at Lake Superior State University in Sault Ste. Marie, told The Bay City Times for a Monday story. "I called the first runner-up and told her I wasn't going to make it."

First runner-up Katie Smrecak, daughter of festival chairman Don Smrecak, will serve as queen until a new king and queen are crowned July 26 at the 53rd Annual Munger Potato Festival.

Munger is an unincorporated town about 85 miles north-northwest of Detroit.

Munger [sic? Nowicki?] said she had a school meeting that conflicted with the St. Patrick's Day Parade and couldn't make the 3 1/2-hour drive.

"To me, it wasn't about getting a crown and getting a sash — it was about getting to meet people and showing my love for Munger," Nowicki said. "Who knows if they're going to do that to next year's queen? I don't want anyone else to have to go through this."

Later in that story, we learn that "Two queen committee members declined comment." A cover-up! Call Oliver Stone!

For those of you thinking of attending this year's festival, it is July 26-30. Here is the schedule of events.....and here is what is going on, just on DAY ONE, Thursday (the order in which the events are listed escapes me):

Thursday, July 26
FIGURE EIGHT DERBY
7:30 P.M.

Queen & King Chosen
7:00 P.M.

Jerkwater Town Boys*
8:00 P.M. till Midnight

Ellitott's Amusements
4 P.M. till Close

LA$ VEGA$ CA$INO
9:00 P.M. till ?

Bingo Tent
8:00 P.M. till ?


And, as the main ad states...well, here's what you can expect:
Family Fun - Activities for the entire family! - Famous Potato Bratwurst - Hot French Fries - Food Tent - Potato Display - Tons Of Free Potatoes

Do me a favor, open the door, let them in.

I'm a big fan of liberal immigration policies. My grandfather came here from Scotland with no skills, no real education (some would say he didn't really speak 'merican english even!!), and made a life for himself and his family opening up a grocery store in NYC. His children became railroad engineers, theologians, and bank vice presidents. His grandchildren have been at various times, airline mechanics, NYC policemen, realtors, and university professors.

I think immigration is win-win. Good for the immigrants and on net good for the host country. Yes I mean all immigrants. Heck, I love Mexico; lived there for two years.

So one would think I'd be happy about the news that the Senate (the worlds greatest deliberative body and all) had voted to take up the immigration bill again.

But.

Holy Crap this is a weird one. Bush and Kennedy? Random amendments? A path to citizenship that takes time, money, and an attention to bureaucratic detail that woulda send my old granddad packing? Nothing to address the extreme limits we put on skilled immigrants?

The system that produced a 1,000+ page free trade bill, that tried to jumpstart the Doha talks by pledging to poor countries that we would definitely commit to capping our agricultural subsidies at a point well ABOVE their current levels, is now going to "do" immigration pressed by a desperate president.

I actually think I'm hoping for no bill at all.

You Have To Learn How To Signal

Dr. Karlson is right in this, as in so many things.

Fighting over whose language to use seems silly.

Of course, maybe I just say that because I teach at a preternaturally expensive private school.....But acquiring a real facility with signals, and learning
how to fit in, and how to think and solve problems, EVEN IF THE PROBLEMS ARE MADE-UP AND ARE REALLY JUST ENTRY BARRIERS....It's valuable.

Education is the lubricant for social intercourse. There, I said it.

If we're so smart, why aren't they rich?

In the May 2007 issue of the American Economic Review, Bill Easterly argues that one reason why the overall package of development assistance offered by the World Bank and the IMF has not been very successful is that they (we?) mistakenly believe that they know what actions are needed to achieve development (ungated link here). First it was Investment that was the key to growth, then Human Capital, then Openness, then Institutions. As Easterly puts it: "Development economists have long known the answers on how to achieve development. The only problem is the answers change over time".


Meanwhile, in the September 2007 issue of the Journal of Development Economics, Robin and I provide empirical confirmation of this point by showing that while countries have become much more homogeneous in their policies (policy variables are converging), output paradoxically continues to diverge (ungated link here).

Specifically we show that Investment, Government Spending and Openness to Trade, and several measures of institutional quality are all converging in our sample of 90 countries from 1960-1999 while per capita incomes continue to diverge. A la Easterly, we interpret this as showing that poor countries have on average followed the development advice of the Bretton Woods Institutions (Bank and Fund), but have not gotten the promised payoff.

Going beyond this point, we also claim that our results show the neo-classical growth model to be totally inadequate to explain the data.

The Blues Brothers: Mike and Linwood!

Mike and Linwood are both out of a job!

Now, I hope that Carrie Fisher can find them, and use her rocket launcher.

Why I am Not Not a Libertarian

DoF asks some good questions, and shares some very useful insights.

My two favorite "kill!" arguments from non-libertarians:

1. You just hate people!

2. You just don't want to pay taxes!

Gosh, those are devestating. I have no answer to those profound insights.

Danny, we hardly knew ye: Drezner Really *IS* a Moral Midget

Good lord! Dan Drezner, who pretends to have libertarian sensibilities, actually thinks that a system of fines for unpredictable, unintentional accidents will make the world a better place. He took a test; I give him an "F"!

(If you want to take the Moral Sense Test, do it now. Spoilers below)

Now, check this, from Dan:

I came across this Moral Sense test at Harvard.

It's an eight question test in which an action is described and then you are asked to award damages.

In the scenarios I was given, I awarded an average of $129 in fines. The average response of all test takers was approximately $72,000.

So, clearly, I'm a heartless bastard. [And you also like to make fun of short people!!--ed.] Or, I'm more willing to blame fortuna than people when bad but (largely) accidental things happen.

Dan! DAN! Walk away from those totalitarians at Tufts, and try to come towards the sound of my voice! THE PREMISE OF THE TEST IS THAT GOVERNMENT SHOULD FINE PEOPLE FOR ACCIDENTS, AND TAKE THE MONEY AT GUN POINT FOR USE IN THE GENERAL FUND!

These are TORTS, not criminal offenses. It is important that the victims do not receive the payment. An average of $129? GOTT IN HIMMEL! I had an "average payment of $0.00! I thought that several of the scenarios (like the peanuts in the allergist's office) were clear negligence, and that there was a cause of action for a law suit. Any allergy sufferer knows, or should know, that peanuts can be deadly, and in an allergist's office one expects to encounter people with.....ALLERGIES!

But not a fine! Why put government in charge of collecting fines when one private person harms another accidentally? You are in favor of criminalizing private mistakes, when there is a private remedy. There is no deterrent effect here, and no pretense of making the damaged party whole.

Danny, Danno, Danton....I thought you were one of us.

Sniffle.

Berndt Coffee?

Interesting paper, by friend of KPC Colleen Berndt, on "Fair Trade Coffee."

Proponents of Fair Trade claim it improves the lives of farmers in developing countries by providing them a higher sale price for their crops, allowing for a higher standard of living, and offering the opportunity to escape the vulnerability of poverty. Drawing on field work conducted in Costa Rica and Guatemala, the author examines the observed effects of Fair Trade and finds it is unclear whether Fair Trade actually delivers on its promise. Rather, it may actually harm the long-term interests of small farmers in high-cost production areas.

ATSRTWT

Per molts anys, Antoni!!

One of the coolest things about visiting Barcelona is scoping the buildings of Catalonian architect Antoni Gaudi, who was born on this date in 1852. The pictures are nice but actually seeing these works is magical. I think Gaudi has been a huge influence on current funky superstar architect Frank Gehry

See more photos here

Now I'm a believer?

According to Sunday's NY Times, new Fed chair Ben Bernanke has made believers out of "the markets".

"Could an Ivy League academic like this ever have Street credibility? But as Mr. Bernanke meets with Fed policy makers this week to set interest rates, the answer is clear: yes, yes and yes again. If anybody has had to learn on the job, it has been Fed watchers and investors rather than Mr. Bernanke."


The article also claims that, despite having underestimated the housing mess, Bernanke has engineered a masterful economic soft landing where inflation falls gradually without a recession and growth picks back up soon. Second quarter growth for this year is being noised about at 3%.

There is at least one economist who doesn't agree, the emphatic Nouriel Roubini.

Me? I'm still stunned that academic economists don't automatically have mad street cred!

To Shoot, Perchance to Dream

Went out to the property in Chatham County yesterday.

Younger younger Munger and I went out early. Ah, the reason to have sons: you get to buy rifles, and pickup trucks, and people think MORE of you, because you are a good dad.















Then, Large Guns Man showed up, with his boys. We put the buffet out on the table. 8 mm Mauser rifle, AR 15, AK 74, the strangest Baretta carbine (with both flashlight and laser, straighth from Halo II), four different shotguns (two coach guns, and two with clips, which is psychotic) and a wild variety of pistols for dessert.













Angus had left behind a cooler after his visit to Duke a year ago. I had used it a few times, but left it at the property. Top blew off in winter, and cooler filled with water. Slime, mold, ick. My fault, a shame to waste the cooler. But since it was wasted, we wasted it good. More than 200 rounds of ammunition, and at least 50 shotgun shells, of many types, were blasted into the cooler at a range of 25 yards. The boys pose with the "kill."

















(Identities disguised to protect the gunnutters, except for my son Brian, and the other kid. The other kid wandered out of the woods, ALMOST DIRECTLY BEHIND THE DIRECTION WE WERE FIRING. He heard the guns, and was drawn like a moth to the cordite.)

Weekend Update

Here at KPC we like to keep you informed about new developments on past posts, so without further ado:

(1) After while, Crocodile! Not if I see you first, Damien Hirst! KPC gave you art collecting advice, listing the most expensive living painters and which were most worth pursuing. Now word comes from the BBC this week that Damien Hirst's top sale price has jumped from $7.4 million to $19.3 million. Similarly, Lucien Freud's record price went from $8.2 million to $15.6 million. Wow, Contempory art prices are showing almost bubble-like behavior. KPC advises selling your Rothkos, Johns, Pollocks and the like ASAP.


(2) The NY Times has GOT to stop copying KPC! Earlier I reported with delight about Gustavo Arellano's awesome column "Ask A Mexican". Now the copycat NY Times has chimed in as well. Back off gray lady, he's OUR Mexican.


(3) Apres disbarment, le deluge! CNN reports that the Duke LAX 3 are (a) seeking to have Mike Nifong charged with criminal contempt of court and (b) asking a judge to order Nifong to pay their legal bills. So dreams do come true!

ROFLMAO

"The word "protection" is no longer taboo," he said. "Competition as an ideology, as a dogma, what has it done for Europe?" He said a competition policy could emerge "that will favour the emergence of European champions".

So, who's "he" you ask? Why it is our good friend Nick Sarkozy, the man who is going to bring economic reform and renewed vitality to France.

What exactly did our man do to re-legitimize protectionism and government favoritism in the EU? He insisted on having the words "undistorted competition" removed from the list of EU goals in the new draft of the constitution.

But Nick, can it really be so simple?

EU lawyers insist the removal of "undistorted competition" from the Union's objectives will have no legal impact on the European Commission's powers to police cartels and anti-competitive behaviour.

Oh, never mind. (and, as Mungowitz likes to say, "read the damn article here")

You Can Check Out Anytime I Want

The Arctic archipelago of Svalbard has become a haven for immigrants,
because an unusual treaty says they do not need a visa or permit to work and
live there ... Longyearbyen is Svalbard's biggest settlement and has about 1,800 residents...The treaty was signed by World War I victors in Paris in 1920. It gave sovereignty over Svalbard to Norway, conditional on there being no barrier to entry...Longyearbyen, named after John Munro Longyear, the American coal miner who founded the town in 1906, lies in a glacial valley on the edge of a fjord. It now has a university, hospital, school and hotels, restaurants and shops. East Europeans also live and work in Longyearbyen and the pizzeria is run by Iranian brothers. In all, there are about 25 nationalities living in the town...But there are two hitches to Svalbard life - the weather, temperatures in winter can fall to -40C, and limited social services. The governor has the right to throw people off the island if they cause trouble or cannot find work or accommodation. (al Jazeera English, ATSRTWT)

(nod to KL, who got thrown off the island LONG ago)

Same Mistakes, Not Different Models

Interesting view of growth problems, in Restoring Japan's Economic Growth, by Adam S. Posen

Why aren't nations rational?

UPDATE: Chapter 6 is available on-line. Simplistic, perhaps, but good questions about growth, and nongrowth.

We need more Michiganders like Wally Wallington

I am leaving Michigan today (much to everyone's relief) and as always I'm struck by the sheer awesomeness of the people here. From Mark Perry, I found the story of Wally Wallington who manipulates and moves 30' x 30' pole barns and 20,000 pound concrete columns with wood, rope, stones, sand, and water. Why? Like the old punchline says, because he can!

Wally thinks he's uncovered how the ancients constructed Stonehenge and plans to singlehandedly erect a concrete replica in his back yard. Check out Wally's fantastic story via YouTube video here.

The north WILL rise again, people.

Biker Brutality

A story of a guy who was tased, and beaten, for riding his bike.

Now, I bet he is one strange guy.

But you can't mess with people like that.

Not just the fault of the police, either. We criminalize things that are no one else's business. As one of my favorite groups, the Corporate Avenger, point out:

"I don't fault the police....'cause the people that run 'em, got 'em on a short leash." (And thanks to Large Guns Man for that!)

(nod to Whacking Day)

Growth: F-cups and Bulging briefs

A remarkable post.

The part about growth struck me as....striking.

The post goes to say that a similar product for men, tentatively being called “bulging briefs biscuits,” is rumored to be ready for release early next year, although some commentators are claiming it may come sooner than expected.

I just HATE it when bulging briefs come sooner than expected. Sort of takes the edge off the whole proceedings. And then you have to talk for half an hour, at least, and hope she doesn't get sleepy.

Also from Japundit:
These new health foods (assuming they actually work) are sure to bulk up the population and also help with Japan’s flagging boinky boinky rate.

Tokyo Times gets the scoop: ATSRTWT

Happy Halloween: Don't say "Boo" for 30 yr Treasuries

We do not need the 30-year bond to meet the government's current financing needs, nor those that we expect to face in coming years. Looking beyond the next few years, as I already observed, we believe that the likely outcome is that the federal government's fiscal position will improve after the temporary setback that we are now experiencing.

There are two less likely outcomes that we have also considered.

First, it is possible that the federal government will return to significant and sustained budget surpluses even more quickly than we now expect. In this event, maintaining current issuance levels of 30-year bonds would be unnecessary and expensive to taxpayers.

The date? October 31, 2001.

Could anyone really have believed this? Surpluses? Sad to read, now.

And then there was this.

Maybe it doesn't matter very much. The 10-year T-bond is the new benchmark, and has been.

It just made me feel nostalgic to think of surpluses. That Halloween, 2001 press release was so confident......

(Nod to JT)

They put the "DOH" in Doha!!

When I first caught the bloggin' bug doing a guest gig on Marginal Revolution, I posted about the dicey prospects of concluding the Doha trade round. Yesterday, a new effort which consisted of the US, EU, Brazil and India negotiating on reducing agricultural subsidies in the US and EU also failed.

The US blamed Brazil & India saying in effect that you gotta give something to get something and Brazil & India absolutely wouldn't give anything.

The Indian trade minister countered by pointing out that while the US had lowered their offer for capping agricultural subsidies to $17 billion (from $22 billion), the current level of said subsidies is around $11 billion. He said such an offer had "no logic or equity". Nicely played sir!!

The US is playing out Rorden Wilkenson's script of ratcheting up the rhetoric:

Now, the U.S. trade representative, Susan Schwab, will head to Geneva, where she will meet with the WTO director general, Pascal Lamy, and appeal to other developing countries to pressure Brazil and India for new concessions that would jump-start the round. "We are absolutely determined not to give up on the Doha round," Schwab said.

and also this:

"Large economies like Brazil and India should not stand in the way
of progress for smaller, poor developing nations - but that appears
to be what happened in Germany this week," Tony Fratto, a
White House spokesman, said.

I really think Doha is done and agree with Dani R that its not such a big deal.

Yeah Baby, Americans do IT better!!

Austan Goolsbee in todays NY Times cites research showing that American firms have been the best at transforming cheap computing power into business productivity (link to article).

Goolsbee (I just love typing that!) cites a paper showing that in sectors like financial services, retail trade, and wholesale trade American takeovers of British firms caused a tremendous productivity advantage over a non-American alternative.

The irrepressible Goolsbee sums up as follows:

Perhaps the lesson from the research can be boiled down to something most Americans clearly understand: The world economy may be tough on your industry but look on the bright side: you could be French.

Amen, Brother

You Mean Economic Growth is NOT a Family Value?

Chris Dillow, at S&M (sorry) posts an interesting thought: economic growth can lead to loosening of family ties. He notes five mechanisms, and links some interesting and on-point research.

A summary (and perhaps an inept one; ATSRTWT!)
1. Dishwasher effect: more technically feasible for people to live alone, outsourcing kitchen jobs to machines
2. Tools, leverage, and capital: The premium on physical strength has diminished, so comparative advantage of men for lots of jobs has shrunk, or disappeared.
3. Creative destruction: more growth, more frictional job loss, more divorces.
4. Social moblity/migration: may be harder to "meet someone," and marriages lack the support structure of nearby families if children or finances strain the union.
5. Aspirations: disparities in income are larger if growth is strong, and women (in particular) can see the consequences of these disparities on telly. Why stand by your man when you can do better? Or, maybe you can do better (My wife certainly could!)

Now, given my views of my family, growing up, I don't mind reducing family ties. I moved out as soon as I could, and didn't go back very much. But I would be upset if my sons had that attitude. MANY people don't like their families; growth and modernity mean they can bail. What are the consequences, long-term, for the nature of society?

governator, rust belt style

I's in yr statehouseraisin' ur taxes, kthxby

From the Guv's own homepage: New Michigan Business Tax Key to State's Economic Future, Creating Jobs

Homenaje a Tyler

You guessed it. I'm in Michigan (visiting family) and here's my best of Michigan list:

1. Sufjan Stevens, second best Michigander of all time (after Pontiac). His album "Greetings from Michigan" (pictured above) is highly recommended.

2. Mark Perry, my ex-student, friend and co-author.

3. Berry Gordy. Motown was the soundtrack of my youth on either CKLW or WKNR radio. I'd put the radio under my pillow and listen into the night. I was constantly on the scrounge for batteries!

4. Sleeping Bear Sand Dunes, trudge to the top and tumble to the bottom. lather rinse repeat. Pretty much the highlight of every summer for me was going there.

5. Iggy Pop , (born James Osterburg). While the Stooges reunion efforts are appallingly bad. The original Stooges were/are awesome. Their first three albums (The Stooges, Fun House, and Raw Power are not to be missed). From Ann Arbor trailer trash to the Godfather of Punk. Well done Ig!

Recycling Humor

Apropos of pretty much nothing, a joke....

Bill and Hillary are now married 40 years. When they first got married, Bill said, "I am putting a box under the bed. You must promise never to look in it." In all their 40 years of marriage, Hillary never looked. However, on the afternoon of their 40th anniversary, curiosity got the best of her, and she lifted the lid and peeked inside. In the box were 3 empty beer cans and $1,874.25 in cash. She closed the box and put it back under the bed. Now that she knew what was in the box, she was doubly curious as to why. That evening they were out for a special dinner. After dinner Hillary could no longer contain her curiosity and she confessed and said "I am so sorry. For all these years I kept my promise and never looked into the box under our bed. However, today the temptation was too much, and I gave in. But now I need to know why do you keep the empty cans in the box?" Bill thought for a while and said, "I guess after all these years you deserve to know the truth. Whenever I was unfaithful to you I put an empty beer can in the box under the bed to remind myself not to do it again." Hillary was shocked, but said, "I am very disappointed and saddened, but I guess after all those years away from home on the road, temptation does happen and I guess that a few times is not that bad considering the years." They hugged and made their peace. A little while later Hillary asked Bill, "Why do you have all that money in the box?" Bill answered, "Whenever the box filled with empty cans, I cashed them in."

Utah

Great times in Utah this year, for the annual Liberty Fund week long gig at Park City.

Some pictures.....




(Nod to K-Rad, for setting up the Facebook Group, "I Found Libert at the Tripod". Just remember: "Everyone do what you want" is not the same as "Anarchy," no matter what your fascist lefty friends say!)

Market Daffy-nitions

When I worked at GMU, one of the best experiences for me was freelancing as a junior associate with Bob Tollison on his antitrust consulting. I quickly (for me at least) learned three things. (1) big time lawyers are really smart, (2) never tell a client work they propose is unnecessary, and (3) anti-trust cases often come down to how the relevant market is defined, which is our present topic.

Consider the old proposed acquisition of Seven up by Pepsi. We (Pepsico) tried to define the market as "stuff to drink", while the government sought to define it as "nationally distributed flavored carbonated beverages". We set about estimating residual demand curves showing that a wide range of beverages were economic substitutes for soda and the battle was joined.

The foregoing is pertinent to the current antitrust proceeding against the proposed Whole Foods purchase of Wild Oats. The government is defining the market as "nationwide operators of premium natural and organic supermarkets", of which Whole Foods and Wild Oats are about all there is. Presumably, Whole Foods seeks to define the market as "places that sell food", where they are not even a drop in the proverbial bucket. My history probably biases me, but I gotta think the latter definition is more nearly correct than the former.

Anyway, if the past is any guide, economists will be hired, elasticities estimated, depositions taken, and then a judge will make a ruling based mainly on how much he liked or didn't like his personal experiences at Whole Foods.

6 degrees of Angus

One of my favorite young artists is Souther Salazar. Heres a pic:

For those of you on the east coast, Souther is having a solo show at Jonathan LeVine Gallery in NYC June 23-July 21.

This morning, Robin was scanning Slate magazine when she remarked "man these videos are ripping off Souther Salazar!!" However, a closer inspection revealed that Souther had indeed done the animation. Too Cool.

Then, the angus CPU dimly recalled having seen the alien video before along with a Rick Santorum reference and was able to pull up this Mungowitz Post. At that time, I didn't recogize the essential Souther-ness of the video.

Everything is Illuminated, people.

A new Consensus on Democracy and Growth??

For all democracy's seductive charms, most empirical work in economics concludes that the partial correlation between democracy and economic growth is if anything, negative (See Barro (1996 Journal of Economic Growth) and also Wacziarg).

However, three new papers are finding different results.

(1) two dudes named Kevin Grier & Michael Munger show that when one expands the sample of countries to include more long term non-democracies than are in the Penn World Tables, and when one accounts for the effects of regime length on growth, democracies enjoy a substantial growth advantage over non-democracies.

(2) Philippe Aghion, Alberto Alesina, and Francesco Trebbi argue that democracy affects economies in a heterogeneous fashion, specifically improving performance in "advanced" sectors.

(3) Torsten Persson and Guido Tabellini study regime transitions and find large growth penalties for exits from democracy.

So maybe there is one less reason to hate democracy!

The Right Thing and Wrong Thing

You have no doubt seen the "fight" in the Alabama Senate. It was more of a smack-down. The sort of man who insults another in public, relying on the character of the target to temper the response, generally has little stomach for actual fight.

Didn't really think much about it, but then I noticed this kind of response. Look: It's a simple rule....you can insult me. But if you insult my mom, there is going to be a fight. You don't want the fight, don't rock the insult. And for those of you unfortunate enough to be born outside the South (including Angus, now a Southerner by importation), if you don't get this, you are likely to get punched.

I was moved to send a letter to Senator Bishop. Here it is:

Senator Charles Bishop
Room 733-D
State House
11 South Union Street
Montgomery, AL 36130

Dear Senator Bishop:

You have recently been at the center of some controversy.

I write in support of your position.

It is perfectly true, as you have said repeatedly, that grown men do not settle differences with fists. This is even more true on the floor of the Senate chamber.

But there is a higher truth. In the South, a heritage you and I share, one man does not attack the character or memory of another man’s mother. There are some insults so infamous that they demand action, regardless of the consequences.

Sometimes, the wrong thing is precisely the right thing to do.

I am sorry to have heard of the criticism you have suffered, and appreciate your attempts to explain. But I don’t see that you had any choice, under the circumstances. One cannot accept such a public affront to she who gave him life.

With all best wishes,
Michael C. Munger

LOLGOLF

Ize in ur Kuntry: Winnin' ur Open!!

More Aid for Africa?

There is a huge and sometimes heated debate about whether Aid helps to create economic growth. The most well-known facet is probably the public debates between Jeff Sachs and Bill Easterly. One odd thing about this debate though is that it is largely conducted by rich country academics, with little input from the "beneficiaries".


However three recent African perspectives on aid can be found as follows:

(1) From today's NY Times "What does Africa Need Most: Technology or Aid?"

The article comes down in favor of technology and entrepreneurship. It also tells the story of the man to built the Congo's vast growing wireless telecom network.

Money quote: "What man ever became rich by holding out a begging bowl?"
(uh, I know this one, Lee Iacocca, right??)

(2) An older piece from Der Spegel (2005) interviewing Kenyan economist James Shikwati

Money quote:

SPIEGEL: What are the Germans supposed to do?

Shikwati: If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.

(3) The writings of George Ayittey, economics professor at American University in DC.

Cry 'Havoc,' and let slip the dogs of war

Two thirds of my hoped for trifecta are in the books. Mike Nifong is not the DA of Durham County and he is disbarred!! Now for the civil suit.

Things are looking good. As he left the courtroom, Reade Seligmann's lawyer said, "I don't think any of us are done with Mr. Nifong yet".

Sweet!

This week's sign of the apocalypse