Assorted links

1. EpsteinUniversity: “Epstein speaks quickly, so pay close attention and rewind frequently.”

2. AngryBear on the teen minimum wage.

3. Josh Barro on….California hamburgers, if you know what I mean.  And you know what, he’s right.  Let’s puncture another myth about SoCal.

4. “I’m too tired to say it anyway and nobody cares.”  More from Will.  Here is a very good and useful Thomas Edsall review of Piketty.

5. EITC enhancement could be a good idea.

6. In praise of passivity.

7. Has there been a major stem cell breakthrough?


3. is sadly true. It is overrated. It's still fun to have a regional burger chain that the locals love and think is So Very Different, even if it is not...

You and he are showing your snobbery and love for the mediocre global corporation serving the lowly masses, which he and you are happy to be elitely above.

How dare anyone extoll a competitor to McD's the global corporation that makes you a big wealthier by cutting corners on food quality to boost stock prices. How can In&Out's no (economic) profits model be a virtue, especially if it spread globally and destroyed billions in wealth buy cutting McD's profits.

People who want better quality than McD's need to be richer and shop at Five Guys where they pay a higher price to enrich shareholders.

Only the very rich get to eat food that is so carefully prepared by very skilled workers, by workers carefully picking each leaf and skillfully carving every carrot garnish that even at $100 a plate, labor costs ensure no profit. The poor are there to generate profits for the rich to afford those $100 plates.

How much did you pay for that Karl Marx tattoo on your back? Was the tattoo parlor an independent or one of a regional chain? Was the fair-trade ink used for Karl's likeness organic and distilled from the products of small, independent farmers in southern Borneo or a toxic chemical brewed up by Monsanto?

You seem to be confused about the difference between "it is overrated" and "it is bad." "It is overrated" doesn't mean it isn't very, very good. Better than McDonald's, and right around on par with Burger King in marginal utility/price terms. Get over the fact that not everyone loves what you love.

Overrated in terms of taste, maybe, but it's no doubt the best burger you can get at that price. Five Guys is three times as expensive, it's not fair to compare them outright.

The taste is definitely overrated. But the difference in price is also overestimated. A cheeseburger with one patty at Five Guys has about as much meat as a double cheeseburger at In&Out has (3.2 oz single patty vs. 2 2 oz patties (pre-cooked weight)). The Five Guys burger cost $1.50 more than In&Out, and you can split the little fries at Five Guys ($1.25 for your half) and have as many fries as you would at In&Out. So a burger and fries at In&Out comes in at $6.40 (pre-tax), while at Five Guys it is $6.14 (these are based on Five Guys prices in SoCal).

I was just using hamburger prices. But a double-double, fries, and a drink comes to $6.15 at in&out. Cheeseburger alone is $6.40 at Five Guys (Norcal). Plus the double-double has more meat.

Anyways, I love them both.

In-N-Out is a good burger, by far the best at the price. It's not the greatest burger ever. If you take your family there on a regular basis, the difference in price adds up. Josh Barro should not be so quick to sneer at the price factor.

Agree with Tommy and Mogden, it's the definitely the best of the cheap burgers that I've tried. I'm not from California but always make a trip to In-N-Out when I'm there because there is something to the experience of the cheap burger that is entirely different than gourmet or up-scale burgers. I consider them different enough to not really be a comparable product.

I don't think price is an excuse in a world where McDonald's exists. (N.B. I have little burger-eating experience outside the British Empire, so you will have to extrapolate from the following.)

Every idiot knows that Burger King is better than McDonald's, and if there is a difference in price, it's not worth tracking. Yet if I want that kind of burger, I will just go to whichever is nearest -- on those days I am not looking for tasty food. Overall, McDonald's is the better restaurant because of its breakfast.

But if I want an actual *nice* burger, I will go to Byron on GBK and sit down, drink undersized American beers, and wait for waitresses. I also pay more -- but not very much more if you exclude the beer money. If you want to compete on burger-quality then that's who you are competing with.

GBK is a good burger (for the British Empire), but it costs about 3x as much as McDonald's. And their fries are not even as good as McDonald's.

If you are judging In-n-Out on the basis of the basic menu, and you are trying to understand why so many people love it, you're doing it wrong. You need to order from the "Secret Menu." I would particularly vouch for the Double Double, Animal Style with chilis and extra pickles. See: But yes, the fries are sub-par.


Barro showed zero investgative effort, creativity and curiosity in this empirical analysis. Always get the fries well done, to begin with.

Agreed - secret menu is the way to go. If his double double is too much, just get the single, animal style. Perhaps with extra toasted bun, and a Neapolitan shake. The secret menu is the key to all in-n-out glory, so you end up having it 'your way'
If you do want the fries, get them crispy, rather than regular (assuming you want them to be more 'fried', as the author apparently did).

I lived in the Bay Area for about a decade all my friends loved In and Out, whenever I visit they all want to take me to one, not one really believes I don't like them. The last thing I want to eat in SF or Oakland is In-n-out.

Barro is wrong though, you can get bacon there, he must be a cheapskate. The deal breaker for me is the fries. No Cali other chain has such bad fries. Acceptable cheap burgers are very cheap in most places I live, good fries are always rare, except in the Boise metro.

Freezing is essential to the fast food fry, In-N-Out's fetishization of a freshness is the problem. Also animal style is disgusting.

"Freezing is essential to the fast food fry".

I disagree. Five Guys also makes their fries from fresh potatoes, and they have excellent fries.

In-N-Out are mostly unique for their consistency. I've had only two sub-par burgers over the course of hundreds of visits to dozens of locations across multiple states. You have to order a double double cheeseburger with grilled onions to get the ratio of fat to toppings+bun correct however. The fries are good for a few minutes after cooking, they retain a lot of potato flavor. Most places in this price range have absolutely flavorless fries which is why they have all those spicy curly fries or potato wedges on the menu. McDonalds does have good traditional french fries though.

I've tried three Five Guys on the west coast and they all served me messy flavorless greaseballs. I can only assume the original locations were better. But I can't really imagine that they would stand out much against Fuddruckers, Smashburger, Fatburger, or a hundred other choices in their price range.

Shake Shack has a far better beef patty than anywhere else there's not a chef grinding to order, but their toppings and bun don't add much to the experience. Neither do the fries.

# 3: Is it a myth that McDonald's (also originally from Southern California) concentrated on the perceived quality of their fries to win fast food market share?

You can order In-n-Out's fries "well done" at which point they can become crunchy potato-esque matchsticks. Fries are not In-n-Out's strong point. And yes, the vaunted Double-Double is going to lose to the almost equally vaunted Father's Office hamburger or some similar chef's concoction in terms of taste.

But it's inexpensive. The taste/performance ratio is far better than the myriad of "upscale burger" joints such as Umami and the Counter, where you feel like a sucker paying that much for a burger.

I prefer Tommy's myself (similar model of family owned, non-franchised locations), and the In-n-Out hype is generated really more by outsiders than those of us here in Southern California. Here, it's one in a huge palette of fast food options. You don't like In-n-Out? Ok, let's go somewhere else. In fact, In-n-Out's popularity gives it the Yogi Berra problem: "No one goes there, it's too crowded". I know I've driven past In-n-Outs in search of a bite to eat upon seeing the epic traffic jam of cars trying to enter the drive through.

The irony of the stereotype of SoCal (that Barro plays to) is how health conscious we all are here, and how we all subsist on some foo-foo trendy raw, organic, cruelty free, gluten free, taste free diet is that the reality is many of the big fast food chains got their start here (McDonald's, Carl's Jr, Jack in the Box, Taco Bell) and obviously still do very well in their original markets.

While the family behind In-n-Out (the Snyders) have had their share of tragedy, it has not affected In-n-Out's bright and cheery culture nor its steady financial success. In contrast, the Zankou Chicken saga is heartbreaking:

Umami is actually pretty awesome. Their combos and beers are also great. Much better "value" on a per calorie basis. The sides and sauces are also great. Granted, I go there during business lunches so price is not a factor.

tm's post captures the So Cal casual dining market the best. I would go further with the observation about the non-health consciousness of So Calif and state that Los Angeles's signature food is not sushi, nor burritos or tacos, nor raw organic vegan whatever, but instead: burgers. Practically every neighborhood has local joints which put out good quality hamburgers and cheeseburgers; not gourmet Umami quality (nor price) and no, not better than the best burger place in your neighborhood. But good stuff. More specifically, these are never fast food places because they make your burger to order, so you have to wait for it. But it's fresh made and quite decent.

In-N-Out has to compete with that, so it's So Calif's mass-market burger chain: way slower (and longer lines, as tm says) than McD's or Burger King, but better burgers.

But although I lived in LA for over 20 years, I rarely went to In-N-Out. If I was in the mood for a local burger I'd go to one of the good local joints; if I was travelling I'd either go to McDonald's for speed and low price, or go to a real restaurant. I'd rarely go to In-N-Out, especially given that the wait is so long I might as well have a real meal.

tm nails it with the mention of Zankou Chicken; that one is the So Calif chain that I rave about. Faster than McDonald's, equally cheap, and far better food. Best fast food that I've had in the USA.

Adrian Ratnapala makes a good observation about McDonald's breakfasts. If I'd stayed up all night and was looking for a lot of breakfast fast before crashing into bed, I'd go to a local McDonald's which served not just the usual Big Breakfast nor even the Big Breakfast with Hotcakes but what they called the Deluxe Big Breakfast: the BB w/HC plus bacon and jam for the biscuit (often they served an English Muffin instead, go figure). Adding the orange juice, this must've been well over 1300 calories.

5. Yeah, right, subsidizing the sales and costs of highly profitable corporations is a great idea if you are a Reaganomic free lunch money from nothing economists.

No one of privilege should be required to pay a living wage nor lower prices enough that (Wall Street)the workers like their own can buy all they produce without borrow and consume by either the private or public sector.

A true negative income tax would tax the rich enough more to pay for the subsidies for the working poor, but all the proposals are borrow and consume.

And those fighting Dodd-Frank are doing so because they want to return to consumer borrow and consume, highly profitable to rent seekers (Wall Street) but bad for those saving for retirement who take the losses if the FDIC doesn't bail them out. Of course, they pay a "tax" in low interest rates, FDIC fee overhead, loss reserves, to cover the spread their savings around to the poor operated by the private sector for high banker bonuses. The "use payday lending to wealth" free lunch economic to lift the working poor out of poverty.

Go back and take a look at that receipt. There's a 9% sales tax on that purchase. What more do you want?

2. Angry Bear is correct that the chart concerning minwage suffers from omitted variable bias. He does a better job modeling it. I do have some reserved criticism and questions.

Did he test for stationarity and cointegration? The academic presumption is that they conduct the standard diagnostic tests, but I never grant that presumption with time series data.

Minwage is binding ONLY when the equilibriim wage is below the floor. It is reasonable to assume that this constraint is more likely to bind during downturns. In other words, there is one effect of recessions in reducing labor demand and another in the interaction between falling wages relative to the price floor. It doesn't appear he is modelling this interaction effect. At least part of the recession effect will be due to the prior minimum wage.

As I said in prior posts, the political decision to raise minwage is endogenous to labor market conditions and the economy in general. This endogeneity must be resolved. It is also endogenous because the NBER calls the recessions based, in part, on the unemployment rate.

There is also a timing issue. Job growth begins to decline before official recessions and the unemployment rate is a lagging indicator. There doesn't seem to be any regard for this lag structure in his model. He also mixes data from the establishment survey and the household survey. The latter is a relatively small sample and the two measures notoriously indicate opposite labor market conditions at times.

There is almost certainly endogeneity between the adult unemployment rate and the teen unemployment rate because they do, in fact, compete for jobs. This competition increases during economic downturns. The endogeneity must be resolved.

The unemployment rate is also a bad measure of the dependent and independent variables. The theory of how minwage affects employment is based on WORKER HOURS, not the number of workers.

Then thereis the issue of wages being sticky downward which will magnify the employment effect of minwage in downturns.

I am suggesting that this is a much more difficult analysis than the lay person can grasp, and all two and three variable charts will fail to do the analysis justice.

I also return to thr argument that the proponents of raising minwage have the burden to justify their intervention into labor markets rather than asserting that opponents must prove adverse labor market effects.

"the NBER calls the recessions based, in part, on the unemployment rate."

That is actually a modern concession to deal with the post Reagan "jobless recoveries" in which real output expanded while labor inputs fell.

Prior to Reagan, consumption was tied to labor income because borrowing was required to be used to buy labor to fund building durable assets. Post Reagan, government borrowed to fund consumption and then banking was deregulated so banks could lend FDIC saving to fund consumption.

If you can borrow to consume, you can be unemployed while helping drive up production by maintaining your consumption when you should no longer be consuming but instead splitting the income of others, for example, by begging for food.

The difference between FDR and Reagan was FDR invested in what he called "self-liquidating" assets to create jobs. Even if a road did not generate tolls or gas taxes to pay for its debt, the increased economic activity generated taxes to service the debt. Reagan borrowed to invest in assets that were self-liquidating only if used in a self liquidating global thermonuclear war - the debt holders would be incinerated eliminating the need to repay them. Both FDR an Reagan borrowed to create jobs, but FDR's debt never became a burden, but Reagan's debt simply diminishes in consequence as Reagan's borrow and spend became the core of free lunch economics.

If you want to argue that minwage workers and the unemployed MUST live within their means to force a classic recession defined by reduced real output, then please call for the creative destruction of those who can't live within their means. Say euthanasia? Slavery? We can't have the dead and dying cluttering the streets.

The dead and the dying were cluttering the streets until Obamacare.

That map where the homeless are is interesting.

#3: I was with him until he put Five Guys on a pedestal. I suppose a burnt disk of meat on a rubbery bun has its fans, but I'm not one of them. Throwing on five pounds of fries that I will throw away does not help. No chain is more over rated than Five Guys.

You can ask them to grill it less.

Why don't you like the fries? Is it the peanut oil? Most people like peanut flavor so they like the fries. But I can see that if you're not a big fan of peanut flavor or peanut oil, that you wouldn't like them.

I think Shake Shack is overrated.

The fries are OK. I don't need five pounds of them. You're not doing me a favor by having me throw food away for you. I've asked for my burger uncooked and it still comes out dry and crispy. I understand the reasoning. They don't want to get sued so that means cooking everything to 500 degrees, but it still tastes horrible.

Is it better than eating road kill or fighting a hobo for a dumpster treasure? Sure, but that's a low bar.

I would say that none of these alternative fast food joints deserve the hype. They're generally good, but not enough to justify the hype they get. The really good ones are gourmet burgers and fries you can get at some trendy restaurants, but they're so expensive that they're not a substitute for the major fast food chains that people compare burgers & fries to.

I think the major appeal of the alternative fast food joints is that people like junky fast food, but they want to be able to eat junky fast food while at the same time being able to say that they never eat McDonald's/Wendy's/Burger King etc. I don't know how many times people have told me how they never eat McDonald's/Wendy's/Burger King as if that's some great achievement or indicative of social superiority. It's especially funny when they say this while chowing down some equally junky burger from Five Guys or some other alternative fast food joint.

I think you nailed it. These joints are bobo fast food as opposed prol fast food.

in-n-out is pretty prol; a cheesburger and fries is under $4. More with a drink, though.

A major appeal is that when you have 10 kids over and swimming for 5 hours it's nice to feed them all for $40 (no drinks!).

Like I did this weekend. It costs more to heat the pool than feed them.

About damn time someone said it. I don't think the Five Guys burger is THAT bad, but their patties are too thick for how hard they cook them and the toppings don't stay with the burger. Bite of meat, bite of bun, bite of jalapenos and cheese. Now, In 'n' Out, one bite will take in bun (or lettuce), tomato, cheese, onion, sauce, and patty, and they make their patties thin so they can cook them to industry standards without making you chew through lots of dry gray meat.

Fatburger > all, however.

Wholeheartedly agree with Fat Burger!

If I crave a cheap hearty heart-exploding burger, nothing beats the customization that Fat Burger allows for...

3)In and Out fries are absolutely terrible.

Not if they're "Animal Style"!

At that point yes you can choke them down but having to drown your fries with russian dressing to make them edible is a problem.

Starch needs sauce! Its not poutine, but its as close as you'll get in California.

No it is not poutine, it is nothing like poutine...

Poutine is awesome especially when you are too far gone after a night on the town. Montreal is the best city on earth to get blotto in, despite liquor taxes, just for this. Animal style on the other hand is the greatest culinary horror known to humankind, it is worse than what they call Pizza in Southern Utah or Mexican food in Upper Saxony.

Personally I think the fries are the best thing there. I agree they're not very crispy, but they've got good potato flavor and just the right amount of salt. I'll take them any day over those oily, potato-starch-dredged fries you get at a lot of places.

Order them well done.

Wow... I didn't think anyone would have such poor taste as to go there. Thank you for that blatant display of homophobia.

Never could connect with the mystique of In-and-Out Burger, even 20 years ago.

...and turning back a motley band of raiders at the "Battle" of Tours has always been overrated by Western historians; you, sir, are no Odo. De gustibus and all that.

Odo who?

6. Humility and modesty in social policy are admirable goals. But it sure doesn't feel like a evolutionarily stable strategy. I try not to get involved (usually because it's very difficult to discern which path is best), but when I do, it's usually to act as a counterweight to idiocy on the other side. (I've been around long enough to see real idiocy in both right and left.) I don't know if the argument properly accounts for the cost of inaction.

This may help explain the effectiveness of negative campaigning: "I'm not sure what's right, but I'm pretty confident that *that* is wrong."

The Angry Bear response is a mess.

1) My original post that the chart is from is basically an event study. He's treating it like a regression. If IBM stock goes down 20% in the hour after they release earnings and I attribute the drop to poor earnings, it's not an effective counterargument to say that I'm using the wrong discount rate in my valuation. With an event study, both the direction of the change and the signature of the change in relation to the event are important. Nevertheless, I addressed the concerns about recessions in follow up posts at my blog before he posted this, but he didn't refer to those posts in his post. Changes in population over time as well as long term changes in labor force participation are also not relevant to an event-based analysis.

Here is a follow up post, where I do account for recessions by doing a regression with the 7 individual events.
If the recessions were simply a matter of bad timing, and the job losses were not MW related, the correlation between the size of the MW hike and job losses would be flat. But, instead, the amount of job losses correlates with the scale of the MW increase. I intend to have another post up on this later today.

2) Unemployment is a terrible way to look for effects from minimum wage increases. Most minimum wage jobs are marginal, and not held by breadwinners, so there tends to be a higher percentage of transfers from employment to not-in-the-labor-force when the minimum wage is hiked. This doesn't show up as unemployment.

In this post: I include a graph of teen labor force participation in the 1960's. This graph answers both the claim that the lost employment is due to recessions and that unemployment is the better indicator. After both minimum wage increases, teen employment plummeted, but the unemployment rate was relatively steady. And, as to ascribing the signature of these labor force losses to the recessions instead of ascribing them to the minimum wage hikes, the graph speaks for itself about who is grasping at straws for glib correlations.

3) He treats each minimum wage increase as a separate incident. So, if there is an increase in 2015 where we see falling employment, then a second increase in 2016, after which we start to see a rebound, this way of looking at it would say, "Employment only fell half the time." Clearly the rate hikes need to be treated as serial events. This is why I use 24 to 30 month periods starting a few months before the first hike. The trend bends down before the first hike, and then tends to bend back up coming out of the last hike. Except for the anomalous period in the 1970's where inflation muddies the picture, the series of MW hikes all happened in 1 or 2 year spans.

Oh, and it's really funny that he opens by complaining about omitted variables and then closes by showing plummeting teen labor force participation in the 2000's together with a table showing low minimum wage levels and a low proportion of teens working at MW, and concludes: "this data strongly supports the thesis that teen participation in the labor market fell sharply in the early 2000′s because the minimum wage was below teens reservation wage." If you say so, champ.

And the last regression he does is over-specified, because the adult unemployment rate is carrying the effect of the minimum wage. He's not going to find a strong correlation by using unemployment anyway (see my previous comment) and he's not going to get anything out of a regression with a time series either, because these are events with a signature of employment behavior over a period of time around the events. You're not going to see the effect just by plugging in monthly data and running the numbers.

I'd also include gas prices as a variable for teen employment.

The Angry Bear response reads like something written by a second-year undergraduate. Kids these days!

Here is my last follow up post. I'd love to see any input statistical folks might have concerning my model.

By using the sharp trend breaks before and after series of minimum wage hikes, I was able to create 18 individual periods of time, 6 of which included minimum wage hikes.

Statistical significances were miniscule. While both minimum wage changes and RGDP growth individually had strong correlations to employment during these periods, residuals from minimum wage increases were fairly uniform, whereas RGDP systematically overestimated Employment-Population Ratios during the periods that had minimum wage hikes.

Additionally, using the scale of the minimum wage hikes produced a better correlation than just using a dummy variable for minimum wage hikes.

These results suggest that employment loss has a proportional association with minimum wage increases.

The final regression showed a cumulative reduction in Teen EPR of 3.6% and a decrease in total EPR of 1.4% during a typical series of minimum wage increases over a 30 month period.

I'm not sure anyone really loves In-n-Out fries the first time you have them. They grow on you though.

Five Guys burgers have the advantage of lots of interesting toppings. A regular lettuce/tomato/sauce burger from 5 guys would be very disappointing and well below the quality of an In-n-Out burger. You really do notice the ingredient quality because of how simple they keep them.

I loved them from first bite. I guess it helps if you like your french fries to taste like potatoes.

Reading between the lines, #3 is pure provincialism. "Here's why things from California aren't as good as things from NEW YORK."

I would say that none of these alternative fast food joints deserve the hype. They're generally good, but not enough to justify the hype they get. The really good ones are gourmet burgers and fries you can get at some trendy restaurants, but they're so expensive that they're not a substitute for the major fast food chains that people compare burgers and fries to.

I think the major appeal of the alternative fast food joints is that people like junky fast food, but they want to be able to eat junky fast food while at the same time being able to say that they never eat McDonald's/Wendy's/Burger King etc. I don't know how many times people have told me how they never eat McDonald's/Wendy's/Burger King as if that's some great achievement or indicative of social superiority. It's especially funny when they say this while chowing down some equally junky burger from Five Guys or some other alternative fast food joint.

In N Out is not a great burger, very few people claim that it is. It is a great fast-food burger. There is a huge difference between the two.

The fries are weak. But the shakes are great.

And anyone leaving half of a double-double because of his concerns about calories has no business ever rating burgers of any sort.

How about eating at In and Out and Five Guys for variety? As we have a teenage son working at McDonald's (for slightly above minimum wage), we get plenty of their burgers and crave a change. Why does everything have to be due to signaling?

#2. I think Republicans should cave on the minimum wage. It makes me sad to say it, because I truly believe such an increase will be bad news for unskilled workers, but politically, it's a loser. Time for a tactical retreat.

This time, let's collect the right data on the impact. I don't think it will be pretty.

The In-N-Out burger is far superior to Five Guys' burger. I eat at both regularly, and it's not close.


Anyway, let me just say that if someone points out that the anti-inequality argument for X is terrible, that doesn’t mean he or she opposes X. He or she might be frustrated that you’re screwing up chances of achieving X by making terrible arguments.

Is there a name for this fallacy? I encounter it all the time.

I do not know anyone as smart as Richard Epstein. He's on a completely different level...

#3 There you have it. I was right all along. USA hamburger buns are, according to the texts on the photographs, *really* made of sponge dough...

I know some great burger joints, but I don't all of them, and in many cases an In N Out is the best gamble. Not least because in California it is pretty easy to get a car full of kids or adults to agree that In N Out works for them. (Yes the secret menu is brilliant marketing, and kids and adults love to go there just to use their arcane knowledge ...) (Some kids have actually demanded that same 4444 Van Nuys Boulevard trip. I thought the burgers that day were a little sub par ... but they were mobbed with order-takers out in the street.)

The link to the In-N-Out burger story was fine, but the best part was that at the bottom I was served a link to a story about "How They Make Lingerie Models Look So Good".

Do In N Out promoters claim that it is the best tasting burger? That strikes me as a straw man, in so far as I have never actually witnessed such a claim. Langers makes the best pastrami in North America, except for Schwartz's in Montreal, but In N Out is more noted for being a strong and reliable value.

"Do In N Out promoters claim that it is the best tasting burger?"

Yes. I've heard a lot of paeans to In-N-Out, and this thread is the first I've ever heard of value or anything about a "secret menu".



Not one comment on Thomas Edsall review of Piketty.

There must be something very powerful in his arguments to be met with such S-I-L-E-N-C-E!

I may have to buy that book.

I really like In-N-Out's fries.

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