Month: September 2005
Brad DeLong, polytheist
Ever since the Mexican peso crisis of 1994-1995, I have been well aware that the Gods of the Dismal Science are cruel and capricious, at times punishing small sins against them with disproportionate retribution.
Here is the full post. Here are a few of my voodoo flags. Here are two more. Here is my favorite.
Opportunity cost
Visits to hospital emergency rooms in Boston plummeted during the city’s most nail-biting sports moments, according to a group of local doctors.
The team found that visits went down to as little as 80% of the average for the key Boston Red Sox games that attracted the most TV viewers. But ER visits rose above the average for games that had fewer viewers.
Is it safer to be watching TV, or do people with emergencies simply wait? Here is the link.
What happened to the Orange Revolution?
Remember the democratization of the Ukraine? Anders Aslund offers a sorry update:
For the past eight months…Ukraine’s economic policy has been nothing short of disastrous. Economic growth has plummeted from an annual 12 per cent last year to 2.8 per cent so far this year, driven by a fall in Âinvestment.
The blame for this startling deterioration must lie with the government’s economic policies. By agitating for widespread nationalisation and renewed sales of privatised companies, the government undermined property rights. In addition, it raised the tax burden sharply to finance huge increases in welfare spending and public wages. Very publicly, Ms Tymoshenko interfered in pricing and property disputes, criticising individual businessmen. Chaos and uncertainty prevailed. This populist policy had little in common with the electoral promises of Viktor Yushchenko, the president, about liberal market reforms.
There is much more, read the whole thing.
Check out the new economics podcasts
There are more economist interviews up at Radioeconomics, in convenient podcast format. New offerings include Becker, Posner, Boudreaux, John Palmer, Craig Newmark, James Hamilton, and others.
New Brazilian economics blog
Portuguese is my favorite language to hear sung. I cannot read it, but here is a new Brazilian economics blog, degustibusblog.net. At the very least I know the authors like me. If you insist on something Brazilian in English, do not forget Eduardo Giannetti’s much underrated The Lies We Live By: The Art of Self-Deception. Heading back to Portuguese, here is a classical liberal site, thanks to Tom Palmer for the pointer.
Michael Flynn does not think the singularity is near
Tyler,
I must admit my amusement at finding that Ray’s [Kurzweil] new book still has no e-format.
Sure, we’re gonna get uploaded — but I hope our bionic fingers are
dextrous enough to turn the pages.
Here is my previous post on the nearness of the singularity.
Markets in everything: putting the homeless to work
It is called Bumvertising.
Bumvertising™, or the use of sign holding vagrants to advertise, is a development of PokerFaceBook.com’s
most recent advertising campaign. Homeless men are able to provide a
valuable and tangible service to a company, while receiving an
additional revenue stream in combination with their normal donations
from begging.
Here is a photo gallery of ads. Here is the company’s "economic analysis" of the practice. Here is some nasty language directed against the founders. And it seems you pay the bums with barter:
Through his own effort and the assistance of his marketing team, Mr.
Rogovy developed signs and accumulated the resources that most bums
would find attractive. Money, sandwiches, chips, apples, water, and
other beverages have all been dispensed in order to compensate the
homeless in the Seattle Bumvertising™ campaign.
I have no direct information on how real this practice is, or if it violates minimum wage laws, but the web site appears legitimate. Thanks to Curt Gardner for the pointer. Comments are open if you know more.
Markets and morals
Markets are indifferent to our love. That is why the emotions we feel toward the market are often perceived as negative. She never reciprocates. Worse, she is indifferent.
That is Kevin Depew, from Victor Niederhoffer’s investment site, which Victor describes as "enterprise-oriented." Here is Victor playing squash. Here is a Victor Niederhoffer quotation. Here is Victor on chess, I once gave him knight odds and he beat me.
Recipes for social change
I think the smart thing for the US state department to do today is build a game about Islam but make it a democracy. And set it up so that every 16-year-old from Morocco to Pakistan can go into that world when they get a computer. Not say anything overt about democracy but have them play — have them vote, for example.
I saw this quotation on the ever-excellent kottke.org. Here is his source, on video game economics. Here is the source interview, worth a read. Here is Edward Castronova’s forthcoming book on video game economics.
Addendum: Speaking of kottke.org, they offer a good link on what makes shy people shy, and can they change?
Second addendum: A reader draws my attention to this rather grisly video game.
Blog post headline of the day
"Is it Gouging if Politicians Charge $1000 for Meal?"
That is Michael Giberson, here is the post.
Paying people to stay in the path of the storm.
By now you have seen pictures of the long lines of cars leaving Texas. Some reports suggest average speeds of one mile per hour. It is unlikely that such a result is optimal.
Randall Parker suggested closing or limiting some of the on-ramps to freeways to limit clogging. Or perhaps we should have given priority to cars with more passengers, in part to encourage "car pooling." I’ve also heard rumors that the police closed off too many secondary roads. We went from paying too little attention to evacuation (Katrina) to pushing evacuation very hard (Rita), but unaware of its full difficulties (not to mention the exploding bus full of old people).
The economist recoils at the idea of quantity restrictions on cars. Might there be a way to use the price system? Having police collect tolls at the major highways is one option, but the very process would slow down traffic. And it doesn’t sound exactly fair to the poor. So how about a more devious, Swiftian idea? Pay people who stay behind. By the day, of course. And only if they own cars.
More on Contingent Fees
The ABA Journal Report has an article on my study of contingent fees (with E. Helland). I liked this:
"I’m actually a proponent of tort reform," Tabarrok says. "But I also believe in freedom of contract. What some reformers propose interferes with how plaintiffs reward their attorneys, and when I see interference with contract, I want there to be a high bar before it’s allowed.
The funniest line, however, was this:
Critics dispute the authors’ fundamental assumption that restrictions on contingent fees increase the incentive of lawyers to charge hourly fees. Despite Tabarrok’s assertion that the assumption is "trivial economics" and that "no economist would disagree with it," economists and legal scholars do.
Imagine that tips for waiters were banned. What would happen to wages? They would increase. No big surprise but apply the same idea to lawyer contingent fees and we get lots of objections.
I’m not fixated on the critics, however, because the main results of the paper are empirical. When contingent fees are restricted the number of dropped cases increases as does the time to settlement. The theory that this occurs because lawyers are shifting toward hourly fees is consistent with the empirical findings but there could be other explanations as well.
Betting odds for the forthcoming world chess championship
Read them here (scroll down just a bit), the Indian Vishy Anand is favored with implicit odds at 34.8 percent. Kasparov says either Anand, Leko, or Topalov will win with probability 95 percent, has he stopped buying their shares?
Addendum: The competition starts Tuesday. I’ve been expecting Topalov to win. Leko folded in his last game against Kramnik in their match. Anand is the most talented player but I feel his time has come and gone. If he had the will to be world champion, he would have achieved it by now, keeping in mind there have been several world championship titles he could have won!
Late breaking news on housing vouchers
From the WSJ Storm News Tracker:
2:32
p.m.: U.S. Homeland Security Secretary Michael Chertoff and Housing
Secretary Alphonso Jackson announced a program to pay for three-month
rental costs anywhere in the country for homeowners or renters whose
residences were destroyed by Katrina.
I agree with John Palmer, who sent me the clip, "This Is So Sensible, I Can Hardly Believe It!"
Congratulations to Ed Olsen!
Trailers Trashed
FEMA’s plan to house hurricane evacuees in trailers is already looking like a disaster:
Federal Emergency Management Agency officials complain of a drastic
shortage of sites suitable to state and local officials for the huge
trailer parks that FEMA hopes to establish for evacuees. Local and
parish leaders say FEMA’s plans to supply the trailer parks with water,
sewer, electricity and other services are haphazard or nonexistent, and
the encampments — some of which could include 15,000 units — are
bigger than any the agency has ever established.
Fortunately, Ed Olsen’s plan to expand the already existing housing voucher program is receiving a lot of support. The Senate has already passed a plan, a House plan is pending, only the administration lags. See also my previous post on Rotting in FEMA City.