Archive for the ‘economics’ Category

Talker

Thursday, April 24th, 2008

I was listening to John McCain talk on NPR this evening, and I have to admit that he knows what to say to get my attention. However, the chasm between his talk and action is huge. Robert Siegel failed to ask obvious follow-up questions, perhaps out of fear of being too confrontational.

If elected president in November, McCain says, he’ll approve an additional $3 billion in taxes over 10 years. He also vows to immediately slash $100 billion in “wasteful” government spending — $65 billion from the federal budget baseline and $35 billion that was approved in spending bills over the past two years.

“The problem is that we’ve presided over a 40 percent increase in the budget over the last eight years,” McCain says, “and that’s got to be brought under control.”

And how, pray tell, are you planning to do that by spending $341.4 million per day keeping the Army in Iraq for the next 100 years?

Here’s a trick. Multiply 341,400,000 by 7. That’s 2,389,800,000. Then multiply that by a short month. That’s 66,914,400,000. Oh, look, I just saved $67 billion!

Are Guidance Counselors Superfluous?

Wednesday, April 23rd, 2008

The Arlington Central School District sends out a newsletter every now and again — oddly enough around budget season. This time it includes a piece titled “Arlington’s Investment Paying Off,” which discusses how additional guidance counselors have dropped the student to counselor ratio from 375:1 to 210:1.

Now, three years into the plan, our commitment to guidance services is clearly paying off. At its all-time high, the guidance counselor to student ratio was 375 to 1. Within the last two years, the counselor to student ratio has dropped to its current average of 210 to 1, a ratio similar to most successful suburban schools.

That’s an awful lot of guidance counselors! 210 to each student?! Wow.

OK, so bad English and math skills aside, what is the return on investment of adding these additional guidance counselors? Apparently, having more of them allows the students to meet with their counselors more often.

When guidance counselors were serving 300+ students from multiple grades, contact with students was infrequent and irregular with some students seeing their counselor only once or twice a year. Members of the Classes of 2010 and 2011 will meet with their guidance counselors five to six times this year.

Granted my high school experience was unlike Arlington’s — the Highland High School student population was, if I recall correctly, 172 souls from grades 7 through 12 — but meeting with one’s guidance counselor seems to me to be entirely unnecessary for most students.

What is it they do? How do we measure their effect? How do we determine whether or not an additional counselor is cost-effective? And without knowing that, how can we say that the investment is paying off?

A Little Less Help, Please

Monday, April 21st, 2008

For those of you not paying attention, fuel costs are up. This change in circumstances changes the calculation of which mode of operation is optimal. In the case of transportation, the cost of long-haul packet shipping over railroads has dropped below that of trucks.

Commenting on this drop, Matthew Yglesias remarks,

Clearly trucks have a massive inherent advantage as a method of doing the last-mile of shipping, but for long-haul stuff a more rational federal policy environment in terms of carbon pricing and road/rail funding balance would give further momentum to this boom.

I think anyone who has bought wheat recently might suggest that Federal subsidies perturb the market substantially, frequently with severe unintended consequences. I highly doubt that Congress expected the price of pizza to rise because they were throwing buckets of money at corn ethanol. In light of the all-too-frequent confirmation that government intervention is a crude implement, perhaps a rational Federal policy environment would stop poking the economy with that stick. Perhaps we might remove subsidies for both highways and railroads, instead of increasing funding for the latter.

I Spent My Last $10 on Birth Control, and Beer

Thursday, April 10th, 2008

The bagel shop is raising prices. The pizza place is raising prices. And a six-pack of my favorite beer has just passed $10 at the grocer.

What, you may ask, am I doing buying beer at the grocer’s? It’s convenient, but that’s beside the point. The point is that commodity prices are going up. The market is perturbed and passing the costs on to me. I might have to start drinking less!

You Made Your Bed, Now Lie in It

Tuesday, April 8th, 2008

I read Joel Spolsky’s “Martian Headsets” post a while back, in which he discusses Microsoft’s about-face with regards to Internet Explorer 8 in terms of balancing backward-compatibility with standards compliance, as if they are necessarily incompatible. Mark Pilgrim followed up with this funny translation into colloquial English.

So I was reading Spolsky’s piece, and nodding, and sort of agreeing that his central premise was correct, and then I got to this part, the conclusion.

98% of the world will install IE8 and say, “It has bugs and I can’t see my sites.” They don’t give a flicking flick about your stupid religious enthusiasm for making web browsers which conform to some mythical, platonic “standard” that is not actually implemented anywhere. They don’t want to hear your stories about messy hacks. They want web browsers that work with actual web sites.

Damn straight we want web browsers that work with actual web sites. But I must beg to differ about 98% of the world installing Internet Exploder 8 of their own volition. If they’re not using Firefox 3.0 because their friends told them it’s the bomb, they’re still using AOL, or Internet Explorer 6 on Windows 2000, or maybe Internet Explorer 7 on Windows XP — but the only reason they switched to IE7 is because it just happened, and unless IE8 offers some compelling advantage, that is the only reason they will switch to IE8.

Oh, and the reason IE8 won’t work with some websites is not standards. Opera and Firefox and Safari do just fine. It’s Microsoft. Site developers have been kowtowing to Internet Explorer’s quirks for years, and have come up with tricks to make Internet Explorer display the site the way that they want the site to be displayed. Either they fork their content so that IE gets the “good stuff,” or they’re willingly putting in more effort to please those customers who just happen to be stuck with a browser older than my kids. (And, no, I don’t mean Netscape Communicator 4.0.) The way around that impasse is to quit being Internet Explorer. Quit asking for special treatment. Quit demanding a segregated web.

We want web browsers that just work with web sites. And we want them to just work whether we’ve chosen to use Microsoft Windows Vista, Apple iPhone, Nintendo Wii, or Ubuntu Linux.

Here We Go Again

Sunday, March 30th, 2008

School budget season has started. This year’s spending increase: 7.2%.

Mandating Health Insurance Will Increase Costs

Tuesday, February 26th, 2008

Providing a health care subsidy or mandating the purchase of health insurance will artificially increase demand which, assuming supply remains constant, will raise costs. Much better to determine why costs are high, and address the causes rather than the symptom.

What are those causes?

Cuba

Monday, February 25th, 2008

I was watching Thursday’s debate between Hillary Clinton and Barack Obama this morning, but came up with some more important things to do shortly after they discussed Cuba. Mrs. Clinton’s comments were insubstantial. Mr. Obama’s were on target. (The debate transcript is behind that link, so I’m only including excerpts.)

CLINTON: I would not meet with him until there was evidence that change was happening, because I think it’s important that they demonstrate clearly that they are committed to change the direction. Then I think, you know, something like diplomatic encounters and negotiations over specifics could take place.

OBAMA: Now, keep in mind that the starting point for our policy in Cuba should be the liberty of the Cuban people. And I think we recognize that that liberty has not existed throughout the Castro regime. And we now have an opportunity to potentially change the relationship between the United States and Cuba after over half a century.

….

And it’s absolutely true that I think our policy has been a failure. I mean, the fact is, is that during my entire lifetime, and Senator Clinton’s entire lifetime, you essentially have seen a Cuba that has been isolated, but has not made progress when it comes to the issues of political rights and personal freedoms that are so important to the people of Cuba. [emphasis mine]

Why should Raúl Castro, or whoever will be the next president of Cuba, want to meet with us? Dictatorships are not like republics: they are not as much under the sway of popular opinion. Since 1961, we’ve restricted commerce with Cuba, in an attempt to remove Fidel Castro from power. It has failed. Death, not the United States, will remove Castro. And death will remove his successors as well. The embargo will not. They prefer death over defeat.

Cuba is playing a game of endurance chicken. Will they run out of money, or friends, first, or shall we? Will they blink first, or shall we? Meanwhile, we pretend that an embargo is an effective means of coercion. It is not. Like a cartel, the participants in an embargo have an incentive to cheat.

Whom do we harm with this embargo?

(In other news, the Cato Institute has analyzed Congressional votes on trade since 1999, and provided a tool for viewing the results online: Free Trade, Free Markets: Rating Congress. Here’s how the current crop of presidential candidates fare: Clinton, McCain, Obama, Paul. Gov. Huckabee has no record.)

I love mountains. Do you?

Saturday, February 23rd, 2008
    
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Walls

Monday, February 4th, 2008

Richard Posner states, It is infeasible to build and man, at reasonable cost, a wall or fence that would actually close our border with Mexico.

Compare the cost and effectiveness of the following walls.

    A Fool and His Money

    Thursday, January 31st, 2008

    I’ve an urge to run an advertisement counter to H&R Block’s refund anticipation loan ads: Wait; you’ll get more money.

    Though I suppose that the people who see this advertisement don’t have a TiVo, and can’t afford to wait. Oh, well. At least Block has stopped calling them “instant refunds.”

    Simple Economics Too Complicated for Lou Dobbs?

    Wednesday, January 23rd, 2008

    I walked past a television at the hospital today, and Lou Dobbs was bemoaning that families could no longer afford college, though I’m sure his can. It seems to me that college tuition has always been expensive. There are many within living memory who were the first in their families to attend college. But it also seems to me as a naive observer that the explanation for the sharp increase in tuition costs over the past 20 years is relatively simple: demand exceeds supply. Why demand exceeds supply is a different question, but, again, I think that’s relatively simple: demand is increased by employers asking for college degrees because of the deflated value of a high school diploma — people think they need a college degree to get a good job — and supply is constrained by the accreditation process.

    I think the same applies to health care costs, but think that the difference there is in the treatment of health insurance as a third-party payor rather than as a means to reduce one’s own risk.

    In both cases, I do agree that they may be of great concern to voters — at least to those who also happen to be journalists — but I don’t think that a $500 Pell grant will significantly reduce the cost of a $40,000 tuition, nor that requiring health insurance for all citizens will reduce the demand for an over-priced good. Nor, even, that either is any business of the Federal government.

    Pfaltzgraff disappointments

    Wednesday, December 26th, 2007

    When we were married, we received a Pfaltzgraff service for eight in the Yorktowne pattern. Over the years, we’ve lost pieces to various calamities, mostly children, so this Christmas I decided to replace the missing pieces. Instead of buying individual pieces, I bought another service for eight.

    I’m glad I did; the new pieces don’t match the old wares. There have been some meaningful design changes since Susquehanna Pfaltzgraff sold the company to Lifetime Brands in 2005: the color is different; the style is different; the design appears printed rather than baked into the glaze; the maker’s mark is printed instead of stamped; the sugar bowl doesn’t have a spot for a spoon; the lid falls off; and the method of manufacture possibly differs, as can be seen from the absence of visible coils. The texture is similar, which is good, but I prefer the older wares.

    Pfaltzgraff was the oldest pottery in the United States. Apparently the Pennsylvania ceramics factories were closed and sold at auction later that year. The new pieces are made somewhere in China.

    In this photograph, the pre-2005 sugar bowl is on the left. old and new Pfaltzgraff sugar bowls

    Mice or Men?

    Saturday, October 13th, 2007

    Randall O’Toole’s latest book, The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future argues that planners don’t know jack shit. I’ll agree with that. However, he’s got such a big bug up his ass about mass transit, that he completely ignores the fact that the highways were planned by the government too.

    The Problem of Health Care Costs

    Wednesday, September 5th, 2007

    When did medical insurance become someone else paying your bills instead of a way to reduce the risk of illness?

    Trade-offs

    Saturday, August 11th, 2007

    The troubling fact is that taking a lot of exercise and then eating a bit more food is not good for the global atmosphere. Eating less and driving to save energy would be better.

    Or so says Chris Goodall, Green Party parliamentary candidate for Oxford West & Abingdon, as quoted in The (London) Times [via Eugene Volokh (via David Sucher) and John Massengale].

    The troubling fact is that living is not good for the global atmosphere. Dying would be better.

    Telephony Substitutes for Transportation

    Friday, August 10th, 2007

    One oddity of visiting my family in Virginia is that there’s little to no cellular phone coverage in Highland County. This is partially due to the landscape, and partially to the lack of antennae, though some claim it is because of the proximity to the National Radio Astronomy Observatory in Green Bank, West Virginia and another listening post in Sugar Grove. Normally, this is not such a problem, as most residences in the county do have landlines, thanks to the Universal Service Fund. It is a problem if, for example, you’re late to meet your sister three mountains and 30 minutes away just to exchange kids, but then your dad will pass the meeting point at the time you originally planned. But since there’s no cellular coverage, you can’t call to ask him to stop, so you’ll make what would be a duplicate trip.

    Robert Jensen, in The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector (Quarterly Journal of Economics, August 2007) [via The Economist], notes that a significant limitation to fish marketing is that while at sea, fishermen are unable to observe prices at any of the numerous markets spread out along the coast. Further, fishermen can typically visit only one market per day because of high transportation costs and the limited duration of the market. As a result, fishermen sell their catch almost exclusively in their local market. This led to inconsistent supplies along the coast. Some markets would have an abundance of fish, while others none at all. That all changed after the introduction of cell phones. Now the fishermen call ahead to find the most profitable market before they head to shore, and can make course corrections in transit. Supply meets demand, and everyone’s happy.