Category: Current Affairs

Occasionally menu costs kick in…Dylan Alexander sends me the following:

Gas at the pump in downtown Birmingham: $3.99/g.
Gas from Hertz when you return it: $3.05/g.

Ha!  Here is a related link.

Here are the details, many well-known buildings seem fine.

I did not see the Red Cross in all the pictures of New Orleans broadcast over the past week.  Where were they?!!  Don Boudreaux at Cafe Hayek points us to the incredible answer:

According to
the Disaster FAQs section of the American Red Cross’s website:

Hurricane Katrina:
Why is the Red Cross not in New
Orleans?

• Access to New Orleans is controlled by the National Guard and local
  authorities and while we are in constant contact with them, we simply cannot
  enter New Orleans against their orders.

• The state Homeland Security Department had requested–and continues to
  request–that the American Red Cross not come back into New Orleans following
  the hurricane. Our presence would keep people from evacuating and encourage
  others to come into the city.

It’s one thing for the government to be incompetent, this I expect.  But then get the F. out of the way.  People are dying. 

What forms of in-kind aid should you bring?  Here is one blogger’s answer.  In accordance with economic reasoning, he suggests toothbrushes instead of toothpaste, and don’t focus on anything that can easily be bought.  Your thoughts?

I had always hoped that Haiti would become more like New Orleans, but what’s happened is New Orleans has become more like Haiti here recently. You know, we don’t have power. We don’t have transportation. At this point, I think, at least the people in the hospital have some fresh water, but they’re telling people you can’t drink the water out of the taps. So there’s people wandering around the city without water, without transportation, without medical care. So in many senses, we have about a million people in the New Orleans area who are experiencing, you know, what Haiti is like.

Here is the link.

If hundreds or thousands died, why didn’t more people leave town?  I can think of a few hypotheses:

1. They were plain, flat out stupid.

2. They were not stupid per se, but human beings underestimate the potential for small probability, massive disruptions to their accustomed status quo.

3. They made a rational calculation, but just happened to catch the wrong number on the roulette wheel of nature.

4. Bad policy meant they didn’t have many good options for leaving.

Sadly, #4 seems to have played a role:

As many as 100,000 inner-city residents didn’t have the means to leave, and an untold number of tourists were stranded by the closing of the airport. The city arranged buses to take people to 10 last-resort shelters, including the Superdome.  (link here).

Some tourists took 76-mile cab rides to Baton Rouge, where they rented cars.  Admittedly, the stayers (arguably even the poor stayers) were stupid not to have done this, but saving lives is more important than who is to blame.  A different framing of the choices might have brought many more people out of town.

Government could have commandeered a fleet of buses to help the carless leave town altogether.  (Was it enough to offer to take them to unappealing shelters?)  Some people foresaw the potential problem in advance, but only Wednesday did buses start taking people out of the city.  Neither FEMA nor the state of Louisiana nor the mayor appears to have done a good job.

When such a disaster comes, should we waive price gouging laws, and temporarily repeal liability for those helping strangers?

Should we expect these same people to protect us from avian flu?

He was a prominent supply-sider in the 1980s and continued to write on economics.  Here is an obituary.

Here is my previous post on whether you should give money to tsunami victims.

Glenn Reynolds offers some suggestions for New Orleans donations.

The September 11, 2001, terrorist attacks are increasingly viewed in the oil-rich Arab countries of the Persian Gulf as the catalyst for an economic boom when Arabs divested from America and reinvested at home.
    Arab investors pulled tens of billions of dollars out of the United States. They were angered by perceived American hostility toward Arabs. They worried their assets would be frozen by U.S. counter-terrorism measures. And U.S. markets happened to be plummeting while economies in the Persian Gulf were on the upswing, buoyed by rising oil prices.
    The results have been spectacular.
    Since late 2001, economies in the six Gulf Cooperation Council countries — Bahrain, United Arab Emirates, Kuwait, Oman, Qatar and Saudi Arabia — have soared, with stock markets up a collective 400 percent. The Standard & Poor’s 500 rose 24 percent over that period.

It is noted that rising oil prices have not hurt either; here is the story.  Dubai has probably been the biggest beneficiary.

Paul Krugman writes:

these days, Americans make a living selling each other houses, paid for with money borrowed from the Chinese.

James Hamilton writes:

Whatever the explanation for the productivity gains of the last decade, the above graph displays every indication that this welcome development is continuing.

A favorite (alas unpublished) theory paper of mine shows:

He who pays the piper calls the tune, but he can only successfully call for a tune that he will recognize upon hearing. … When experts must pay to acquire information, have no intrinsic interest in client topics, and can coordinate to acquire the same information, no expert ever pays to know more than any client will know when rewarding those experts.

So why should you ever believe what you read?  Consider “Avoid bridge, construction delays.”  The newspaper might fear that you will try the bridge, and think less of them if their forecast is bad.  Or they might fear that your close friend will, and tell you.

How about “Michael Jackson arrested today”?  Few readers would normally check this firsthand, but if a big story like this was wrong then a competing publication might make a stink, and then one of your friends might check it out.  For the vast majority of media claims, however, there is little incentive to make a big stink, and few people who care would ever learn the truth given a stink.  So if it takes the media much effort to learn the truth, why should they bother?

Media watchdog charities might claim to check for you, but why should you believe they share your interest in knowing the truth, instead of just wanting you to write them a check?  Bloggers can also claim to help you check, but if those bloggers mainly care about attracting readers (an interest MR and others often admit), the same problem remains.

The only real solution I can see is to make better use of the people you have good reason to think really do share your strong interest in knowing the truth about some topic.  So connected blogs by people who know each other in other ways may be the key.  Perhaps such networks lower the cost of raising a stink to the people who care.

Of course it may also be that most of us do not really care about the truth; we might just want interesting new things to talk about with each other.  Which might explain the otherwise-surprising lack of interest in this problem (which applies to academia at least as well as to the media).

1. New Zealand may pull out of the Kyoto Treaty.  Although the country is not a major polluter, it would incur high costs to meet the specified standards.  Furthermore it misestimated how much adjustment would be required, and now faces an unexpectedly large bill of compliance.

2. The National Party candidate, Donald Brash, is more or less a libertarian.  The election for Prime Minister will be held September 17.  Brash has been falling behind in the polls because he leaves open the possibility of sending New Zealand troops to Iraq.  I predict he will lose.

3. New Zealand is making extensive preparations for avian flu.  A country of four million people is stockpiling at least 800,000 doses of Tamiflu.

4. New Zealand economists — including the libertarians — usually regard the Bush Social Security plan as a disaster in the making.  They favor, as do I, separating out the welfare and "forced savings" components of any reform.  My thinking on this issue had been influenced by the time I spent here in the early 1990s.

5. "Pox parties" are becoming increasingly popular.  Parents take their kids to parties to expose them to measles, chicken pox, etc., to build up their immunity and to avoid the need for supposedly dangerous vaccines.  NB: This practice is not recommended.