Month: August 2004

One more idea for Bush

Last week I presented twelve ideas for a domestic economic policy Republican vision for a Bush second term. I appreciate all those who wrote with additional ideas, or who suggested they might write in my name for President.

I will add one additional proposal:

13. Cut the number of pages in the daily Federal Register by half.

The American economy is drastically overregulated. But do not get me wrong here. I do not wish to gut important environmental regulations, many of which supply valuable public goods. To take one example, my benefits from the ban on low-quality gasoline probably exceed the costs I pay for all other regulations. Try spending a week in Mexico City in December if you are not convinced.

But I do wish to gut the median regulation issued by the Department of Agriculture, or by the Federal Communications Commission, to name two examples. Browse through a typical issue of the Federal Register to find other candidates for elimination.

It is fair to ask where I would make regulation stronger. First, I would do more to tax pollution. Taxes on purely productive activities should be correspondingly lower.

Animal cruelty also leaps to mind; currently we do very little to limit cruelty to animals in factory farms. I don’t take an extreme animal rights point of view, but animals do count for something. There are billions of them held in captivity, and our treatment of them counts as a great shame.

Lost in Translation

Here from a survey of translators are the top ten most difficult to translate words.


1 ilunga [Tshiluba word for a person who is ready to forgive any abuse for the first time; to tolerate it a second time; but never a third time. Note: Tshiluba is a Bantu language spoken in south-eastern Congo, and Zaire]

2 shlimazl [Yiddish for a chronically unlucky person]

3 radioukacz [Polish for a person who worked as a telegraphist for the resistance movements on the Soviet side of the Iron Curtain]

4 naa [Japanese word only used in the Kansai area of Japan, to emphasise statements or agree with someone]

5 altahmam [Arabic for a kind of deep sadness]

6 gezellig [Dutch for cosy]

7 saudade [Portuguese for a certain type of longing]

8 selathirupavar [Tamil for a certain type of truancy]

9 pochemuchka [Russian for a person who asks a lot of questions]

10 klloshar [Albanian for loser]


1 plenipotentiary

2 gobbledegook

3 serendipity

4 poppycock

5 googly

6 Spam

7 whimsy

8 bumf

9 chuffed

10 kitsch

My take: It’s rather common to hear that language determines thought and thus if a language has no words for a concept then that concept can’t really be understood by a speaker of that language. I find this theory difficult to believe (perhaps it was first proposed in a language other than English.) If the theory is true, however, I would like to learn the language where “spam” is untranslatable.

Dutch Auction IPO

googleHere is a nice graphic from the NYTimes explaining the Dutch auction IPO. I think Google’s IPO will be a success, it will raise more money for Google than a traditional IPO with its high transactions costs (which flow to the investment banks). Remember the standard to measure success is the cost per dollar of raised funds it is not whether the stock price hits a predefined target and not whether the stock pops. Indeed, Google’s stock price is unlikely to pop. The success of a traditional IPO is often counted by the size of the pop but that is ridiculous. A pop means the firm left money on the table – money which was transferred to a handful of insiders who were allocated stock at the low IPO price. A pop is thus the sign of a bad IPO not a good one. The Dutch auction method ensures that the initial price is a market price (thus Google’s price is unlikely to plummet either). There has been a lot of negative publicity about the Google IPO but my guess is that this was stirred up by the investment banks who are fearful that their halcyon days are ending.

Will John Kerry bring fiscal discipline?

No, but a Republican Congress might:

My AEI colleague Eric Engen and I [Kevin Hassett] just completed a detailed analysis of the Kerry spending proposals. To perform the analysis, we combed through Kerry’s web site and public statements to assemble a list of every spending promise he has made, and then dug through the public record to find third-party cost estimates for each of his proposals. When necessary, we adjusted the period for the existing score to the 10-year budget window using standard techniques. When we could not find such cost estimates, we relied on numbers that were supplied by the Kerry campaign. When the Kerry campaign did not provide cost estimates, we set the score for that promise to zero.

Even with that generous accounting, the Kerry spending promises add up to an extraordinary amount of money. Our best estimate is that Kerry’s proposals will add up to between $2 trillion and $2.1 trillion over the next ten years. Since the revenue from his tax proposals relative to the current baseline is actually negative, this implies that the Kerry proposal would increase the deficit by perhaps as much as $2.5 trillion over the next ten years.

On August 3, 2004, the Kerry campaign responded to criticisms such as this with a revised budget plan. The main difference between the first and second plans is that the campaign now claims to be able to save about $300 billion from eliminating corporate welfare. Even if we include this rather implausible savings in our estimate, the net increase in the deficit associated with Kerry’s proposals is on the order of $2.2 trillion.

What would he spend the money on? According to our analysis, roughly half of this additional spending is attributable to Senator Kerry’s health care proposals that would add more than $900 billion in federal outlays. Education expenditure accounts for nearly one quarter of Kerry’s new spending, with almost $500 billion added over ten years. A $400 billion expansion of military personnel and benefits for veterans comprises most of the remainder of Kerry’s spending plans, with the balance distributed among numerous social programs and increases in international aid.

I have not been through these numbers, but Kerry has not exactly been running on a platform of spending cuts. Most of all, I’d like to see a further analysis, weighting each number by the probability it will pass into law.

Thanks to TCS for the link.

Do Not Pass Go…

Crime doesn’t pay, but criminals just might.

That is what more and more local governments are hoping, as they grapple with soaring prison populations and budget pressures.

To help cover the costs of incarceration, corrections officers and politicians are more frequently billing inmates for their room and board, an idea popular with voters.

Here in suburban Macomb County, 25 miles north of Detroit, Sheriff Mark Hackel has one of the most successful of these programs in the nation. Last year, the sheriff’s department collected nearly $1.5 million in what are being called “pay to stay” fees from many of the 22,000 people who spent time in the county jail.

Inmates are billed for room and board on a sliding scale of $8 to $56 a day, depending on ability to pay [TC: hey, that’s price discrimination!]. When they are released, the sheriff’s office will go to court to collect the unpaid bills, seizing cars or putting some inmates back in jail. The wife of one inmate, a Chrysler truck factory worker who is serving half a year for drunk driving, dropped off a check for $7,212 this week to cover part of his bill, the largest single amount ever collected by the sheriff.

I’m not comfortable with this notion, since I don’t think government prisons should move toward becoming profit centers. And ex post, elasticity of demand is not very high. But now more than half of the states are collecting fees of some kind from their prisons. It is noted, however, that Martha Stewart will not be paying for her time in jail.

Here is the full story.

That’s [Not] All Right

Elvis Presley is on the charts again but the owners of That’s All Right are worried because as of January 1 2005, Presley’s 50 year old classic enters the public domain in Europe.

Under current EU law, sound recordings are classified as “performance” and copyrighted for a period of 50 years. This is not to be confused with compositions, which remain in copyright for the artist’s lifetime plus 70 years…

Nevertheless what this law does mean is that, from January, anyone may store, share, swap or commercially release That’s All Right without recourse to RCA, who currently own rights to the track as part of their back catalogue. …

Faced for the first time with losing significant back catalogue profits, the industry is lobbying to change the law. …[But]for every one recording that has the power to reach number three in the commercial charts fifty years after its original release, there are hundreds if not thousands of tracks that do not.

Although these recordings no longer have any commercial value to their rights holders, they are of tremendous value in terms of our cultural heritage. But the mechanisms of copyright law mean that, should the European Parliament choose to heed the music industry, keeping Elvis out of the public domain for a further 45 years or even more, the King will drag down with him this huge body of commercially worthless but culturally significant work.

Works of no commercial value will be orphaned, languishing in forgotten store cupboards at record company headquarters when they could be enjoying a digital rebirth in the public domain.

A solution to this problem is already in use for patents. Renewal fees. Renewal fees for copyright extension would allow Disney, RCA and those few others with very valuable property rights to maintain those rights while at the same time the vast majority of “commercially worthless but culturally significant work” would flow into the public domain.

Note that I am not arguing that we should extend the rights of Disney, I stand with my betters in seeing little benefit to doing so, but if political pressures force policy in that direction we need not lock everything up in order to protect the few cash cows. A renewal system should be politically viable because the fees can be made low enough so as not to greatly concern Disney or RCA, yet high enough so that most works will flow to the public domain. Owners of profitable works will benefit and owners of non-profitable works will not be harmed.

Aside: Suzanne Scotchmer has an important but difficult paper arguing that renewal fees can be optimal. Here is another clever idea to improve the patent system. As usual email me if you can’t access the link.

What has Virginia come to?

A Virginia mother was sentenced yesterday to 10 days in jail for defying a court order not to smoke in front of her children.

Tamara Silvius, 44, who has said she smokes about a pack of cigarettes a day, was led from a Caroline County courtroom in handcuffs. But the judge allowed her to post a $500 bond to stay out of jail while she appeals the ruling.

“It should never have come to this,” Silvius said in a telephone interview, after spending four hours in jail before being released. “. . . I hope and pray my two little kids don’t think they had their mama sent to jail.”

The sentence is the latest development in a bitter and long-running battle between Silvius and her ex-husband, Steven Silvius, over custody of their children, ages 10 and 8…

Tamara Silvius already had violated the court order once. At Thanksgiving, while driving her children to South Carolina, Silvius, wanting to smoke as she drove, tacked up plastic between the front and back seats and secured it with duct tape. In January, she was found guilty of violating the order in that instance and was given a 10-day suspended sentence.

Here is the full story.

Going for the gold

This sort of nonsense gives property rights a bad name.

Strict regulations published by Athens 2004 last week dictate that spectators may be refused admission to events if they are carrying food or drinks made by companies that did not see fit to sponsor the games.

Sweltering sports fans who seek refuge from the soaring temperatures with a soft drink other than one made by Coca-Cola will be told to leave the banned refreshment at the gates or be shut out. High on the list of blacklisted beverages is Pepsi, but even the wrong bottle of water could land spectators in trouble.

Thanks to Boing, Boing, Blog for the link.

Markets in everything

Hey, I bet you never expected to see the U.S. Postal Service pop up under this heading. But in fact they have allowed to test their new feature of personalized postage stamps. You can pay $16.99 for a sheet of 20 37-cent postage stamps, designed by you.

So far pictures of babies and families make up two-thirds of the total. Pets are popular too. Unlike with regular stamps, living people can be featured. But nudity, violence, controversial images, and politically partisan stamps are banned (people will quickly develop coded messages). Nor can you use copyright-protected material.

Here is one account, here is another.

When someone sends me a letter with a “MarginalRevolution” stamp, then I’ll be impressed.

Report on Transhumanism

Ron Bailey reports on The World Transhumanist Association’s annual conference. Plently of interesting material on the prospects for life-extension and other improvements. Perhaps the most optimistic speaker, however, was my colleague Robin Hanson.

George Mason University economics professor Robin Hanson argued that super-rational posthumans in the future won’t be able to “agree to disagree,” chiefly because they’ll agree on everything. Hanson argues that disagreements among less than super-rational people today exist largely because we deceive ourselves about what we really know to be true. There are good “reasons” for us to think that, for example, “the more you believe in yourself, the more you can get other people to believe in you,” and thus get them to do what you want. But super-rational posthumans won’t be able to deceive themselves or others, suggests Hanson.

I shall have to discuss this with him at lunch tomorrow but only if we can agree on what restaurant to eat at.

Further thoughts on declining architecture

Last week I asked why urban architecture appears to have declined in the United States. Readers have offered two further suggestions (also read the trackbacks on the original post):

1. Property taxes create an incentive to improve interior quality rather than exterior quality

2. The need to accommodate automobiles makes it harder to design attractive buildings and cities.

The New York Times ran a feature story on exactly this question. Here is a key passage:

As more high-profile buildings by foreign architects rise in the United States, and as computers allow architects to strive for engineering, design and construction complexities never before imagined, a gathering rumble can be heard across the profession about the way America builds. The country has garnered a reputation for overlooking gaping joints, sloppy measurements and obvious blemishes, and refusing to deviate from even the most outmoded standardized practices. Having exported its expertise, in the 80’s and early 90’s, to destinations from Singapore to Dubai, it is now facing stiff competition from Europe and Asia, where the building traditions favor singularity, craftsmanship and durability over speed and cost.

Most recently at Seattle’s new Central Library, Rem Koolhaas, the Dutch architect, set out to debunk what is perceived as an all-too-common attitude in the American construction industry: if it looks hard to build, don’t, because it will be too expensive. According to Joshua Ramus – a partner at Koolhaas’s firm, Office of Metropolitan Architecture, who is in charge of American projects – no American contractor wanted to take on the building’s highly unusual structure, which is folded like a gigantic mesh party napkin. “They said there was no way anyone could do that on that budget,” Mr. Ramus said of the $165 million library. “We said: `Invest in thinking. It may be expensive but it’s a lot cheaper than bad building.’ “

Construction in the United States relies on the quick fix, said Sara Hart, a senior editor at Architectural Record. “Got a gaping one-inch space between frame and window? Just fill it in with silicone and call it a day. Not perfectly flush or plumb? Who cares!” is the typical American response, she said. “While in Germany or Switzerland, they’d rather die than have a gap of more than one-eighth or even one-sixteenth of an inch.” And though no one is calling Frank Gehry’s Walt Disney Concert Hall slapdash, most American construction aspires to cookie-cutter commercial development rather than high-profile brand-name architecture. Furthermore, in Europe, buildings tend to be smaller and clients accustomed to spending more. One way or another, the conditions have made for considerable bragging rights on the part of European and Asian architects.

Dana Buntrock, an architecture professor at the University of California, Berkeley, and the author of “Japanese Architecture as a Collaborative Process” (Spon Press, 2001), said she once believed that quality was tied to wealth. “Now I am beginning to wonder if well-built architecture occurs only at a very fragile economic moment,” she said. “You need not only affluence, but a group of people who are well paid enough to remain in the crafts and building trades even though they are intelligent, and you need the overall size of an architectural project to remain relatively small.” While enclaves of craftsmen and small companies cultivating specialty talents, like customized steel work or casting plaster, are growing in the United States, large corporate construction companies still rule the sites, with their supersize-me approach to building.

Some of these claims, of course, beg the “why” question. The article also notes that design approval now requires more sign-offs than ever before, which tends to encourage a least common denominator approach to moving forward.

Good names make you sexier

New research has revealed that the vowel sounds in your name could influence how others judge the attractiveness of your face.

Amy Perfors, a cognitive scientist at the Massachusetts Institute of Technology, who carried out the study, believes the effect is subconscious. Observers unwittingly deem others better looking if they have the right moniker, she says.

Perfors made the discovery by posting pictures of 24 friends on, a website that allows users to award marks out of ten for others’ attractiveness. Names are not usually displayed with the pictures, but for her experiment Perfors made sure that a name (not necessarily a truthful one) was displayed in the photo’s upper corner.

She later posted the same photographs with different names, and once again collected the feedback. Average scores for the faces changed depending on the name they were given, Perfors told the annual meeting of the Cognitive Science Society last week in Chicago, Illinois.

OK, so what works?

…what are the ingredients of a sexy name? For boys, a good name will contain vowel sounds made at the front of the mouth, such as ‘e’ or ‘i’ sounds [TC: hey, I think “y” counts…]; names with fuller, rounder vowel sounds such as ‘u’ tend to score lower. So pat yourself on the back if you’re called Ben… but if your name is Paul you might have to work harder to snare a date.

The opposite is true for girls, Perfors found. Women with round-sounding names such as Laura tended to score higher than those with smaller vowel sounds. “Unfortunately for me, Amy is one of the bad names,” Perfors laments.

The finding that men with ‘small-sounding’ names are attractive might seem counterintuitive, Perfors admits. “Front-mouth vowels imply smallness,” she says. “But when girls are looking for mates, they don’t necessarily want a super testosterone-charged guy. They want someone who will hang around and be a provider.”

Here is the full story, with some additional results as well. And right here you can judge Amy, the researcher. Take care to remember that her middle name is Francesca.

Putting a Bounty on Osama

The gang over at Crooked Timber are having a good time laughing at James Miller’s suggestion to increase the bounty on Osama bin Laden.

I’m puzzled, don’t the gang know that the United States has been putting bounties on terrorists since 1984? Or that Qusay and Uday Hussein were located due to a reward – as was Al Qaeda leader Khalid Sheikh Mohammed, as was Ramzi Yousef, the mastermind of the 1993 WTC bombing as were the terrorists responsible for the destruction of Pan Am 103? Could the gang be unaware that in the United States bounty hunters have a better record than the public police both at preventing bail jumping and apprehending fugitives once they have jumped bail?

Regular readers of MR will, of course, be better informed. By the way, my paper on the US system, The Fugitive: Evidence on Public versus Private Law Enforcement from Bail Jumping has just been published in the Journal of Law and Economics or email me if you don’t have access to the JLE.