Month: May 2013
Assorted links
Rising academic salaries for coaches
Even during the recession, salaries for athletic coaches at colleges and universities continued to increase. For instance in the SEC, between 2006 and 2011, “football coaching salaries increased 128.9 percent, from $3,147,149 to $6,928,989.” This is an extreme example but it reflects a more general pattern:
That big-time coaches earn more than professors may not be a surprise, but a new study documents the striking extent and longevity of the gap: Coaches’ salaries increase year after year at much higher rates — even as many colleges say they are engaged in belt-tightening across they board — and that pattern is driven by the institutions with the largest athletic programs.
…Athletics is tied much more closely to the commercial marketplace than all other parts of a university, Hirko said, which is why salaries and other expenses continue to rise at rates seemingly independent of the rest of the institution.
The full story is here. Here is a must-view map on the highest-paid public employee in each state; what have Montana, Alaska, and Delaware done wrong? (No wonder those states have so few people!) And New Hampshire is beyond the pale.
*A History of England in 100 Places*
This 2011 book by John Julius Norwich is both an excellent travel book and one of the very best ways of learning more about the history of England. It is remarkably wide-ranging and properly treats economic and technological (and artistic) history on a par with political history. Here is one short excerpt:
Of all the villages of Suffolk, Lavenham — pronounced with a short ‘a’ as in have — is the most enchanting. It is a monument to the huge boom in the wool industry that occurred between about 1380 and 1550, and seems to have changed amazingly little since. Here you will find not just individual timber-framed houses but whole streets of them, their overhanging jetties leaning and lurching like drunken platoons. The Guildhall in the Market Place was built in the 1520s by one of the three guilds founded to regulate the wool trade. Another, now known simply as the Wool Hall, dates from 1464; it stands on the corner of Lady Street and now forms part of the Swan Hotel.
…These churches [TC: they are sometimes called “Wool Churches”] demonstrate, better than anything else could, the fabulous wealth of their benefactors, the late medieval wool merchants, some of whom, by the end of the fourteenth century, had become rich enough to replace the Florentine financiers who underwrote the royal debts.
Definitely recommended, you can buy the book here.
Daniel Klein views the rise of government through Ngram
Here is the abstract:
In this very casual paper, I reproduce results from the Google Ngram Viewer. The main thrust is to show that around 1880 governmentalization of society and culture began to set in — a great transformation, as Karl Polanyi called it. But that great transformation came as a reaction to liberalism, the first great transformation. The Ngrams shown include liberty, constitutional liberty, faith, eternity, God, social gospel, college professors, psychology, economics, sociology, anthropology, political science, criminology, new liberalism, old liberalism, public school system, Pledge of Allegiance, income tax, government control, run the country, lead the country, lead the nation, national unity, priorities, social justice, equal opportunity, economic inequality, forced to work, living wage, social needs, our society, bundle of rights, property rights, capitalism, right-wing, left-wing, virtue, wisdom, prudence, benevolence, diligence, fortitude, propriety, ought, good conduct, bad conduct, good works, evil, sentiments, impartial, objective, subjective, normative, values, preferences, beliefs, and information.
The paper is here. Here is one example:
Assorted links
1. The essence of the Roman empire.
2. Some charming side streets (Genoa could be added to the list).
3. The supply elasticity of Bitcoin, and macroeconomic bras, from Japan.
Questions that are rarely asked (from the comments)
The fact that the US is running a persistent trade deficit and experiencing significant net capital inflows seems like very strong evidence that we are not in a traditional Keynesian situation, where we have ‘excess saving.’
If we have excess saving, why are we having a capital inflow rather than a capital outflow?
If combined private and public demand were below the economy’s productive capacity, why are we running a trade deficit? Doesn’t the existence of a persistent trade deficit indicate that our demand is in excess of our supply?
Very much not our grandma’s recession.
Bundling
John McCain has introduced a bill to “encourage the wholesale and retail unbundling of programming by distributors and programmers.” Would a la carte pricing result in lower prices and greater consumer welfare or would it raise prices and result in less investment in television media? Time to take a look at the economics of bundling. In this video from our MRUniversity course on media economics I review the theory of bundling and then apply it to cable TV.
http://youtu.be/8mw5RLzWNnE
A Marxist take on “the great stagnation”
From Will Davies:
Wandering around Stratford Westfield the other day, I had a similar but more pessimistic thought: maybe capitalism is gradually morphing into the ‘actually existing’ state socialism of the old Eastern Bloc. (For international readers, Stratford Westfield is a vast shopping centre that was strategically located between the 2012 Olympic Park and the nearest train station, in the hope of rinsing unfortunate athletics fans for some cashen route to the games.) British capitalism already has many of the hallmarks of Brezhnev-era socialist decline: macroeconomic stagnation, a population as much too bored as scared to protest about very much, a state that performs tongue-in-cheek legitimacy, politicians playing with statistics to try and delay the moment of economic reckoning.
…My feeling is (and I discuss this in a book I’m just finishing) that neoliberalism has entered a post-critical, repetitive phase, in which certain things have to be spoken – delivery, efficiency, security, competitiveness – but in order to hold the edifice together, rather than to reveal anything as objectively ‘delivered’, ‘efficient’, ‘secure’ or ‘competitive. Political systems which do not create space for critique encounter this need for mandatory repetition immediately, as occurred to state socialism.
Eastern bloc socialism had to keep going through the 1970s and 80s, in spite of lagging growth and failed ideological hegemony, because nobody knew what else to do. This is the stage neoliberal policy-making has now reached. The difference is that there is still one area of our economy that is still moving and changing, namely the money economy, with corporate profits high and financial innovation ongoing. What seems to have changed, post-2008, is that the price paid for this monetary dynamism is that the rest of us all have to stand completely still. In order that ‘they’ in the banks can cling on to their modernity of liquidity and ultra-fast turnover, ‘we’ outside have to relinquish our modernity, of a future that is any different from the present. Finance is to our stagnant societies what the space race and the Cold War were to the Eastern Bloc countries of the 1970s and 80s – a huge cost that the state imposes on its public, with the result that cities and economies start to become tedious processions of the same.
The link is here (good photos), and the underlying Potlatch blog is here. The blog has plenty of interest, and this is an amusing post about advertising.
More on the bending of the health care cost curve
If Slow Rate Of Health Care Spending Growth Persists, Projections May Be Off By $770 Billion
David Cutler & Nikhil Sahni
Health Affairs, May 2013, Pages 841-850Abstract:
Despite earlier forecasts to the contrary, US health care spending growth has slowed in the past four years, continuing a trend that began in the early 2000s. In this article we attempt to identify why US health care spending growth has slowed, and we explore the spending implications if the trend continues for the next decade. We find that the 2007–09 recession, a one-time event, accounted for 37 percent of the slowdown between 2003 and 2012. A decline in private insurance coverage and cuts to some Medicare payment rates accounted for another 8 percent of the slowdown, leaving 55 percent of the spending slowdown unexplained. We conclude that a host of fundamental changes — including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency — were responsible for the majority of the slowdown in spending growth. If these trends continue during 2013–22, public-sector health care spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the US economy and on government and household finances.
This was sent to me in an email from Rob Raffety, but I believe it emanates from Kevin Lewis. A link to the content is here. Another relevant article is here, and it also sounds a cautiously optimistic note.
David Pogue praises Feedly
Here is part of his analysis:
The one everybody keeps saying is the natural heir to Google Reader, though, is Feedly.com. In fact, Feedly says the ranks of its four million users have swelled to seven million since Google’s Reader death sentence was announced.
It requires a free plug-in for the Firefox, Chrome and Safari browsers. Three factors in particular make it useful.
First, the biggie: Simply logging into Feedly with your Google name and password instantly re-creates your Google Reader setup. All of your news sources, favorites and tags — category names that you can apply to certain articles, for ease in rounding them up later — magically show up in Feedly, ready to use. The synchronization is two-way; until July 1, you can bounce between Reader and Feedly to your heart’s content, and your newsreader worlds will look identical.
I plan to try a switch soon.
Assorted links
Sodomy and Usury
Aristotle thought that usury and sodomy were related because in both cases there was attempted reproduction in an unnatural way. (Yeah, I don’t get it either. The argument would have been better as an argument against cloning. No matter, the argument was influential).
In a very good piece, Jeet Heer contrasts the ancients with Adam Smith and the liberal, free market tradition:
Aristotle’s linkage of non-procreative sex with usury profoundly influenced Christian thinkers. Thomas Aquinas, whose Summa Theologica codified the fusion of Aristotle with Christianity, argued that sodomy and usury were both “sins against nature, in which the very order of nature is violated, an injury done to God himself, who sets nature in order.” Echoing Aquinas, Dante placed sodomites and usurers in the same circle of Hell in the Divine Comedy. In his 1935 tract “Social Credit,” Ezra Pound, whose obsession with crackpot economics took him down many historical byways, argued that “usury and sodomy, the Church condemned as a pair, to one hell, the same for one reason, namely that they are both against natural increase.”
There is a flipside to this tradition of seeing sodomy as the enemy of the natural economy of the household: The counter-tradition of liberal economics founded by Adam Smith challenged the household model by seeing economics as rooted in the free trade of goods between households and nations. Precisely because Smith was more receptive to previously condemned or taboo economic activities like trade and manufacturing, he was also more open to sexual liberalism.
Smith’s friend Alexander Dalrymple is now thought to have written an anonymous tract, Thoughts of an Old Man (1800), recalling that the founder of modern economics believed that “sodomy was a thing in itself indifferent”—a radical thing to say even in private at a time when sodomy was a capital offence, condemned by church and state.
…Smith’s new and somewhat inchoate ideas were pushed further by Bentham, who in an unpublished essay observed that sodomy “produces no pain in anyone” but “on the contrary it produces pleasure.”
…It’s no accident that in 1787 Bentham wrote a “Defence of Usury,” which tried to convince Adam Smith to take a more benevolent view of the hitherto morally sanctioned economic activity. On the subject of both usury and sodomy, Bentham’s inclination was to take Smith’s liberal impulses to their logical end. Bentham was in favour of consensual adult acts (be they sexual or economic) that led to greater happiness, whether they violated pre-existing taboos or not.
It was, of course, also no accident that Tyler posted on Bentham last week. Here is a good extract of Bentham on usury.
Hat tip: The Browser.
The Public Choice Outreach Conference 2013!
Students are invited to apply to the Public Choice Outreach Conference. The Conference is an intensive lecture series on public choice and constitutional economics that has “graduated” some of the leading lights in economics and political science over the past thirty years. The conference will be held at George Mason University from Friday August 16 to Sunday August 18.
Graduate students and advanced undergraduates majoring in economics, history, international studies, law, philosophy, political science, psychology, public administration, religious studies, and sociology have attended past conferences. Applicants unfamiliar with Public Choice and students from outside of George Mason University are especially encouraged. A small stipend is available and meals and rooms will be provided by the conference (for non-locals). Space, however, is very limited.
Applications are due June 21. You can find more information here. Contact Lisa Hill-Corley if you have further questions about applications.
Is the Fed able to offset “austerity”?
David Beckworth serves up another very good blog post and directs us to this graph of nominal gdp; it seems aggregate demand has been recovering steadily:
Scott Sumner directs us to Marcus Nunes, but here is a quotation from Scott:
In 1937 real government purchases recoiled 4.2% and the economy tanked. In 2012 real government purchases were 4.8% below the 2010 level and the recovery is slow!
Surely something is going on that´s making comparable ‘fiscal austerity’ so much less damning in 2012 than in 1937.
And that ‘something’ is monetary policy.
Here are further remarks from Scott.
Markets in everything
The market for methadone vomit in prison is lively, and the preferred recipe for this cocktail is one part puke (strained, please, bartender) to one part Tang.
Here is more, interesting on other points too, by Graeme Wood, mostly on the drug problem in the country of Georgia, and the pointer is from Wonkbook.