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1. Leijonhufvud interviews Hayek.

2. Displaced cargo containers, whole slide show here.

3. Tsunami early warning systems are effective.

4. What predicts longevity?

5. Beatles reviewed 1000 years from now (video).

6. Using the new MR search function to read about Daylight Savings Time.

I am learning how much I rely on the total familiarity of my immediate visual field.  I look at the blogging box for WordPress (which by the way isn’t that different from Typepad) and I am baffled.  In the writing process everything feels molasses slow, but I will get used to it.

We are still working out some bugs, but if you are having problems with the site please let us know in the comments.  Thanks!

Two different Tylers talk about the Tyranny of the Majority.

Earlier today:

I like Joel’s book but I think he is far too pessimistic about the prospects for diversity in the modern world.

But when discussing the different flavors of economics:

The very existence of heterodox economics brings benefits.  A
personal anecdote will suffice.  My first two publications were both in
heterodox journals: the Journal of Post Keynesian Economics and the (institutionalist) Review of Social Economy.
These articles lifted me into a top graduate school and financial aid
(can you imagine how confused the admissions committees were to see a
GMU undergrad with an apparently leftie publication record?).  I would
not have had comparable success at Econometrica.

This tale relates to the value of diversity more generally.  We will
miss much of the value of diversity by simply listing a bunch of
diverse elements and evaluating them one-by-one.  Diversity brings
broader benefits by allowing people to use niches as ladders to further
steps, frequently into the mainstream, or in my case into another
niche.  Diversity is also a form of insurance, and of course it doesn’t
always pay off.  Finally many excellent mainstream or sometimes even
right-wing economists started with an intense interest in social
justice, often gleaned from heterodox writings.  Vernon Smith was once
a socialist, and George Stigler was early on a trust-basher.

Yes the profession is getting better but we also are losing too much
diversity in terms of schools of thought.  The diminution of the
Austrian School, as an organized and intellectually alive phenomenon
seems to me a shame, even though I don’t believe in a unique Austrian
method.  Heterodoxies encourage the mainstream to be more philosophical
and more self-reflective.

Sometimes intellectual inefficiency is efficient, and my remarks about heterodox economics should be taken in this light.

The emphasis is mine.  As is the question: Isn’t the second Tyler describing the Tyranny of the Majority?  If so, what are the Waldfogel-ian fixed costs that are preventing all the different flavors of economics from flourishing?

A long story leading to an interesting question: I like to keep half an eye on heterodox economics.  A lot of this work raises interesting questions about the methodology that is my bread-and-butter.  I think of this as useful intellectual discipline: those who don’t school themselves in the limitations or ethical constraints of our frameworks, are likely to mis-use them.  And that got me thinking about a particular sub-group: The Post-Autistic Economics Movement.  Reading some (but not all) of the output of these heterodox economists can be quite illuminating.

But Post-Autistic?  Really?  What kind of insult is that? 

Two answers:

1. A pretty darn good insult.  Some of the agents in our models would in fact rightly be called autistic.  Those two words are pretty clever, and occasionally telling.
2. A terrible insult.  Post-Autistic" is designed to shock.  It is a statement more about the insulter than the insultee.  And as the subject of the insult changes, surely it loses its force.  Based on titles alone, which critical journal would you rather read: Feminist Economics, or the Post-Autistic Economics Review?  (Aside: Feminist Economics is, in my view, an excellent and underrated journal.)

But still, it got me thinking. What does an insult communicate?  At what point does an insult switch from being an insult to a statement about the insulter?  There must be a signaling story here, but I haven’t quite figured it out.  And if signaling yields a theory of insults, what would the characteristics of the optimal insult be?

So with some trepidation, let me say, comments are open.

A new book by my friend and Wharton colleague, Joel Waldfogel.  I’ve not read it yet, but based on our lunchtime conversations, I’m looking forward to it. (Hint: what does it take to get a free copy?)  Plus you’ve got to admire any book invoking the Rolling Stones in the title.

Joel has summarized the main arguments in his latest column at Slate.  Certainly a subtle and fascinating hypothesis about
how and when markets can fail us.  More commentary (from the Wharton writers) here.

An interesting (and emphatic) broadside from Richard Freeman.  And this is no Country Doctor making it up on the fly: Richard has long understood the Australian labour market better than just about any other economist, and certainly better anyone outside Australia.  (Dan Hamermesh is a close runner-up.)

My $0.02: This is what happens when conservative governments confuse decentralization and deregulation.

I love my Nintendo Wii… And while I already look like a dork swinging imaginary tennis rackets you can be assured of a whole new level of dorkiness now that Dance Dance Revolution is available for the Wii.

But I won’t be alone.  I was visiting the San Francisco Fed two weeks ago, and a Wii was hooked up to a movie screen in the cafeteria.  This time it was Wii tennis, but think about the possibilities: next time dancing economists?

Two remaining questions:

• Will Tyler be joining the fun?
• Will this hurt Betsey’s productivity?

Back when I worked in a factory as a welder, that phrase was music to my ears. At the very least, an extended smoke break was in the offing while the foreman argued with the inspector. But here I offer it as a suggestion for what to do with the World Bank. I know it is unlikely; large bureaucracies do not easily go away. The Bank for International Settlements was set up to handle war reparations and still lives on and the IMF has survived the collapse of the system it was set up to monitor (Bretton Woods).

There are several reasons for considering shutting down the WB. Its history of policy advice has not always been the greatest, and its IADB arm that makes market rate loans is not really needed in this era of global financing. And, when it comes to dispensing aid, its a monopolistic bureaucracy that seems at times more concerned with quantity than quality (David Ellerman has a nice piece on the WB that discusses its quasi monopoly status under the heading Structural Problem #1).  I believe there are viable alternative modes of disbursing aid. Consider for example organizations like Global Giving which collects vetted projects on its website. There donors can search for and contribute to specific projects. Decentralized, streamlined and "ownership" of the project seems clearly delineated.

So lets "shut ‘er down" and move on. But if we can’t not replace Wolfowitz (son of Wolfenson), lets at least do the right thing and replace him with this proud son of Oklahoma.

Last week I discussed the dilemma facing Independence Air, suggesting that a business model predicated on both regional jets and low fares was unlikely to survive.

Independence Air filed for bankruptcy today. There’s been much speculation about when this would happen, so my writing on the subject was hardly prescient.

The airline plans to hold a court-supervised auction, hoping that a buyer can be found during the next 60 days. They have $24 million in unrestricted cash which they believe will be sufficient to fund operations during this time.

I don’t have a prediction on whether or not the airline will find a buyer. Prudence would suggest not, but the old joke about how to become a millionaire quickly comes to mind…

Start out with a billion dollars and invest in an airline.

There seems to be endless streams of capital which flow towards ill-fated airline operations. (Anyone interested might just keep an eye on eBay, entire airlines do tend to pop up there now and again.)

I may squeeze in one more post before my guest stint ends later today.  If not, my sincere thanks to Tyler and Alex for inviting me to guest blog, and to all of the Marginal Revolution readers who sent me notes and questions.  The quality and thoughtfulness of those emails was really quite astounding!

I just booked an executive room at the Hilton Tokyo for $3 a night on Expedia. The rate includes breakfast.  (The rate on Hilton’s website appears to be ~ US$300 per night.)

Mistake fares and hotel rates happen all the time. The easiest way to learn about them is to sign up for emails from FareAlert.

Usually there’s a keystroke error somewhere and boom… One of my favorites a few years ago was a $55 refundable/changeable business class ticket to Puerta Vallarta. While I was laying on the beach at the Westin there I missed British Airways’ $20 fares from the U.S. to anywhere in Europe. Many of the fares show up at Flyertalk.com in the "Mileage Run" forum, and are then sent out by mass email on FareAlert. It’s been covered extensively in the media, though, and there are thousands of subscribers — so once you get an email you have to act quickly.

This Hilton rate won’t last long. This is what fare alert had to say a few minutes ago:

The Hilton Tokyo is offering rooms for only $2/night (and $3/night for executive level rooms which include breakfast). This offer appears to be valid at least through August 2006, and should work for all dates where the hotel is not sold out.

There’s always some chance that the rate won’t be honored by the hotel, so wait a few days before buying airline tickets…

Update 9:41 am: A quick call to United Mileage Plus and I have 2 first class award tickets to Tokyo (flying ANA) on hold, the plan is to stay a week and then go on to Bangkok (using Thai Airways on the same award ticket) for a few days.  It’s just on hold – I haven’t ticketed yet – I’ll wait to be sure the hotel in Tokyo honors the $3 rate.  And I’ll still check out award availability on a bunch of other airlines before settling on a plan.

Update 10:08 am: The Hilton Osaka is also available on the same rate glitch over at Expedia.

Update 11:29 am: The deal is no longer available at the Hilton Tokyo, Expedia shows no availability for any date.  However it does seem to still be bookable at the Hilton Osaka.

It’s free the first year and $30 thereafter, comes with a signup bonus of 6,000 points with your first purchase and up to 6,000 more for hotel stays, and offers points which can be used for hotel nights or converted 1:1 into most airline programs (it’s not a good option for accumulating United miles, since the ratio is 1:2 – BankOne, which provided a plurality of United’s debtor-in-possession financing, didn’t like competition from this card).

When you covert 20,000 points at a time into airline miles Starwood gives you 5,000 bonus miles — which means you’re really earning 1.25 miles per dollar on most every carrier, better earning than most airlines’ own co-branded offerings. The flexibility, though, is the best benefit. With, say, an American Airlines Mastercard you’re stuck with American Airlines miles. With the Starwood American Express you earn whatever miles you want and you don’t have to decide until later.

An example of the power of this card — spend $50,000 on the United Visa or American Mastercard, and you have enough miles for a coach ticket to Europe. Spend $50,000 on the Starwood American Express, and you can transfer those 50,000 points to Cathay Pacific in exchange for 60,000 Asia Miles which are enough for a business class ticket on British Airways from the East Coast of the U.S. to most destinations in Europe.

My own personal solution involves also carrying a Diners Club card and a Hilton American Express. This combination won’t work out as well for everyone, however.

The Diners Club card is now a Mastercard, so it’s accepted universally. I use the card with merchants that don’t take American Express. Their points program offers transfers into most airline and hotel programs. I can even launder United or American miles into other programs through this program (with some devaluation).

Since Diners Club became a Mastercard, it lost some of its unique features — such as two billing cycles to pay and a lower than usual foreign currency conversion charge. But it maintains its primary insurance coverage on rental cars (in many cases if you wreck a rental car paid for with this card your own insurance doesn’t need to know, in contrast most cards provide only secondary rental insurance), and since it’s a Mastercard it’s useful for airline and hotel promotions that require payments with that brand of card (such as Hyatt’s outstanding Faster Free Nights promo).

Downsides to the card are a charge for transferring points to airline miles (95 cents per 1000 miles) and a $90 annual fee. I rent cars enough to make this worthwhile.

I use the free Hilton American Express only for things where I earn bonus points (5 Hilton points per dollar instead of the standard 3). I use it at the grocery store and at restaurants and my cell phone bill is automatically charged to the card. I run no more than $1000 or $1500 a month on this card. If I ever run out of Gold status with Hilton, I’ll probably notch up the spending to reach $20,000 in a year which will requalify me for that level in the Hilton HHonors program.

One of the most important pieces of advice is to stay away from proprietary rewards programs, like the CapitalOne GoMiles card.

Proprietary miles programs have marketing appeal, offering "any seat on any airline" and tapping into the frustration that some feel trying to redeem their miles. But these programs turn the value proposition of miles on their head. Miles are most useful for tickets that would have been too expensive to purchase — international business or first class tickets, or even last minute cross-country flights (which aren’t as expensive as they used to be). Proprietary programs generally offer coach seats, which have to be purchased a few weeks in advance, and the amount of airfare that they’ll pay is usually capped.

Furthermore, proprietary miles can be earned only through credit card spending so it may be harder to earn enough points for a free ticket than it is with a traditional frequent flyer program. Airline and hotel points can be earned through a variety of partnerships, whether it’s telephone or internet or mortgage financing, let alone actually flying or spending the night somewhere.

Proprietary programs amount to a cash rebate card where you can only spend the rebate on specific travel offerings.

So What’s In Your Wallet? Comments are open.

In the Financial Times today or on John’s website.

US President George W. Bush made four assertions: there are large uncertainties about the science and the economics; the Kyoto agreement would involve large costs and negligible benefits for the US; proposals to deal with greenhouse gas emissions that exclude developing countries are ineffective; and that research and development on new technologies should take priority over expenditure for meeting emissions reduction targets. It pains me to say it but on all points Mr Bush is right.

If we accept that the risk of a greenhouse effect is large enough to demand action, the question is: what sort of action?

Greenhouse gas emissions are cumulative; it seems likely that more good will come of stopping the flow entirely later than slightly slowing it now. If only the faddish short-term fixes (such as offshore wind farms) were likely to lead to longer-term solutions (such as nuclear fusion, or solar after three more decades of Moore’s Law-type progress) – we wouldn’t have to make difficult choices today.