Results for “department why not” 147 found
Cutting the fat
Dieting is difficult because it’s so much easier to give in to temptation and consume what you should not. It’s a constant struggle to cut the fat. The same is true in business. Economists may write down a “cost curve” on the blackboard but these curves, which represent the minimum cost of producing a particular quantity, are not given to the firm they are products of the firm. It takes effort and attention and willpower to keep costs low. Letting costs go by raising salaries, increasing benefits and paying little attention to the bottom line is easy and, for a time, pleasant which is why firms need strong incentives, including the carrot of profit and the stick of loss, to get and stay trim.
Government agencies face few such incentives. As a result, fat is rampant. Case in point, California prison guards. To encourage fitness the California Department of Corrections created a fitness bonus some years ago. The bonus was quite substantial, $100 per month but to get it guards had to pass a fitness test involving sit-ups, running and jumping. Five years ago the state paid out about $5 million for the fitness incentive. But who wants to be the bad guy who denies a prison guard a bonus? No one – if they aren’t paying the bills.
As a result, the fitness test started to get easier as the bonus got larger. Last year, California shelled out $33.2 million for fitness bonuses and some 80 percent of prison employees, not just guards but wardens and mangers also, now get the fitness bonus. Of course, a test is no longer required – all the employee need do to get the bonus is visit a doctor once per year.
With the California budget crunch even the politically poweful prison guards are having to cut some fat but in the long run recognize the incentive structure and don’t expect government to go on a diet.
Living on Pennies
Here is a heart-breaking series of stories about living in poverty in the third world. The Congo is so poor there are no jobs just “se debrouiller – French for getting by, or eking a living out of nothing.” Sweatshops in these countries would be a blessing but corruption, war and violence keep foreign investment away.
Even the corruption, however, is sadly understandable. The government has no money and so pays its workers with the opportunity to take bribes. And thus the country is trapped. The corruption tax prevents the people from starting businesses and accumulating capital, corruption can’t be fought without funds to pay workers but there are no funds because corruption prevents the earning of income.
But even a society living on the edge needs civil servants. Men with government seals, such as Pancrace Rwiyereka, a grandfatherly former schoolteacher who runs Goma’s Division of Work, engage in their own version of se debrouiller.
They don’t bring home an actual salary, but the majority still show up for work every day. A government job gives them the opportunity to demand money from businesses and members of the public. Their official jobs are a charade.
“Bribes are the answer,” said a mid-level government employee in the finance department. “Why do you think we would never give up our jobs or strike to get our salaries?”
Authorities require entrepreneurs importing goods to obtain stamps from at least six agencies: the main customs office, an immigration office, a health agency, a separate health office that certifies goods for consumption, the governor’s tax revenue office and a provincial office that collects money from truckers for nonexistent road rehabilitation.
Thanks to Marc Andreessen for the pointer.
Was the 20th century one of inflation?
Peter Gordon looks at a 1902 Sears Roebuck catalog and asks whether money was worth more back then.
Of course it depends how much you are given. $5.00 back then goes a longer way, but I would rather earn $100,000 a year today, and yes that is not adjusting for inflation. For Peter modern pharmaceuticals are the clincher:
Would you want their best 1902 camera for $7.90? Probably not. High-end cutlery for 6 for $1.79? Why not? A great western saddle for $8.95? Sure.
It’s the Sears “Drug Department” that is the real eye opener. “Fat Folks, Take Rose’s Obesity Powders and Watch the Result … $4.20 per dozen boxes.” Herb laxative teas for 16 cents a box may be OK. Dr. Rose’s Arsenic Complexion Wafers 35 cents a box may have few takers today. Vin Vitae for 69 cents (“Not a Medicine … Not Merely a Tonic”). The “White Ribbon Secret Liquor Cure” went for $2.50 a box. The list goes on and does focus the mind.
My question for today: Does this mean that we should adjust the gdp deflator series to show ongoing deflation for the 20th century?
Here is a general plug for Peter’s excellent blog. Here is Virginia Postrel on how we underestimate the benefits from new products.
Is the shopping mall dead?
More and more large department stores are moving out of centralized shopping malls. Consumers prefer big stand-alone boxes.
Why might this be? Consider a few reasons:
1. A stand-alone store has better retail focus. It can target its marketing, direct mail, and advertising more effectively.
2. People like to park right in front of their destination.
3. You go to malls to browse and shop; you go to off-mall stores to actually buy things. Competing entertainment sources have lowered the importance of shopping as a leisure activity.
It is less clear whether a shopping mall is likely further from where you live. On one hand, a mall is probably centrally located. On the other hand, a mall is harder to place because of its size. You can splatter a bunch of Best Buy stores around a suburban area, but you could not do the same for the Mall of America in Minneapolis.
What about good ol’ introspection?: I prefer the big boxes. My reasons are simple. I am a man and I prefer buying to shopping. And I hate parking garages, which are common in malls. I am also willing to let these foibles determine where I shop. By the way, here is a previous MR post on the socialist origins of the shopping mall concept.
The sorry state of economic literacy
…there is a great deal of confusion about basic facts relevant to policy. Almost half the public, and a quarter of those over age 55, thought Medicare already provided drug benefits for outpatients before legislation providing such coverage was enacted. More than half could not hazard a guess about the size of the budget deficit. The average person thinks 37 percent of Americans lack health insurance, more than twice the actual percentage.
From where do Americans learn about the economy? By far the most common source is television. Those who rely on television the most, however, tend to be among the least informed.
The second most common source is local newspapers, which were cited much more frequently than national or big-city papers.
Friends and relatives came in third, followed by political leaders, radio and economists. The Internet was next, although a sizable contingent listed it as their most important source.
Those who consulted more sources, and consulted them more often, were a bit better informed – but not much. That’s a sobering fact for the media.
People who said they voted in the last presidential election were better informed than nonvoters.
Liberals, moderates and conservatives all did about equally well on the test of economic facts. But those who said they hadn’t thought much about their ideological leanings – one in three people – were appreciably less knowledgeable.
That’s all from Alan Krueger, writing in The New York Times. His bottom line is that ideology, not self-interest, predicts public opinions about economics.
On the same topic, here is one of my favorite essays by Bryan Caplan. Here is one good bit:
In stark contrast to income, education exerts a powerful influence over a wide range of economic beliefs… The typical cab driver with a Ph.D. in philosophy shares the economic outlook of other Ph.D.’s, not other cab drivers. Given the strong correlation between income and education, though, widespread misconceptions about the “beliefs of the rich” are quite understandable.
Further below Craig Newmark offers remarks on related topics.
Kristof on child labor
Here is Nicholas Kristof on the terrible consequences of so-called international labor standards.
It’s appalling that Abakr, like tens of millions of other children abroad, is working instead of attending school. But prohibiting child labor wouldn’t do him any good, for there’s no school in the area for him to attend. If child labor hawks manage to keep Abakr from working, without giving him a school to attend, he and his family will simply be poorer than ever.
And that’s the problem when Americans get on their high horses about child labor, without understanding the cruel third world economics that cause it. The push by Democrats like John Kerry for international labor standards is well intentioned, but it is also oblivious to third world realities.
Look, I feel like Scrooge when I speak out against bans on sweatshops or on child labor. In the West, it’s hard to find anyone outside a university economics department who agrees with me. But the basic Western attitude – particularly among Democrats and warm-and-fuzzy humanitarians – sometimes ends up making things worse.
Kristof goes beyond attacking soft-headed thinking, he also suggests a soft-hearted alternative.
It’s bribery. The U.N. World Food Program runs a model foreign aid effort called the school feeding program. It offers free meals to children in poor schools…. “If there were meals here, parents would send their kids,” said Muhammad Adam, a teacher in Toukoultoukouli.
School feeding costs just 19 cents per day per child.
I spoke with officials at the World Food Program [you can donate at this link, Alex], and they’d be thrilled to have private groups or individuals help sponsor school feedings. Children in Africa will be much better off with a hot meal and an education than with your self-righteous indignation.So here’s my challenge to university students: Instead of spending your energy boycotting Nike or pressing for barriers against child labor, why not sponsor school meals in places like Toukoultoukouli?
Aside: The only thing Kristof misses is that the soft-hearted demand for international labor standards often masks labor union protectionism. Another case of bootleggers and Baptists. And here is Tyler with more on the economics of child labor.
Bootleggers and Baptists
The Arizona Daily Star reports that Nogales, Arizona will be opening a new state-of-the-art truck inspection station:
The governor touted the new Motor Carrier Inspection Station as a state-of-the-art facility that will improve homeland security while not slowing down international traffic between the United States and Mexico.
It gives state and U.S. federal officials a one-stop shop to inspect drivers’ immigration papers, the safety of their semi-trucks, and the quality and safety of cargo crossing into the country.
But a legal challenge hangs over the new facility:
Attorneys about to argue a federal lawsuit against the NAFTA plan allowing Mexican trucks into the United States aren’t satisfied. They will plead their case before the the U.S. Supreme Court on April 21.
The problem with the new station: It isn’t required to check emissions on incoming trucks.
That means they aren’t being held to the same standards as U.S. trucks and will only worsen air quality standards, said John Weissglass, the San Francisco-based attorney representing the International Brotherhood of Teamsters in the lawsuit. In 2002, the Teamsters, watchdog group Public Citizen, and environmental groups sued the U.S. Department of Transportation to stop the NAFTA plan, citing environmental concerns, which eventually forced the government to conduct a $1.8 million study looking at the plan’s environmental impact.
They say politics makes strange bedfellows, but the Teamsters and Public Citizen? Bruce Yandle of Clemson explains it with a theory he calls Bootleggers and Baptists. The bootleggers like prohibition because it gets rid of competitors. But a politican who wants to listen to the bootleggers needs a more high-minded cause to sell to the public. The Baptists give the politicians cover with the argument that drink is from the devil–it leads to social unrest, unemployment, higher social costs and so on. Same with Mexican trucks. Who can justify keeping out lower cost Mexican trucks just to keep the wages of Teamsters high. Enter Public Citizen. This isn’t about greed. It’s about keeping American air clean.
The appeal of self-righteousness partnering with self-interest also explains why companies often support regulation of their industry. They’ll claim a concern for safety or the environment but often such regulations fall more heavily on smaller competitors and will drive them out of business.
There’s nothing wrong with politicians having both high-minded and low-minded motives. The real problem is that the bootleggers always push the form of the regulation to create higher profits.
NAFTA was supposed to allow Mexican truck companies to compete in the US. We’re still waiting. Before the environmental issue, the alleged worry of the Teamsters was safety. My take on that claim is here.
“Curing” Obesity
Researchers claim to have discovered one of the key causes of obese America. The AP reports:
Researchers say they’ve found more evidence of a link between a rapid rise in obesity and a corn product used to sweeten soft drinks and food since the 1970s.
The researchers examined consumption records from the U.S. Department of Agriculture for 1967-2000 and combined it with previous research and their own analyses.
The data showed an increase in the use of high-fructose corn sweeteners in the late 1970s and 1980s “coincidental with the epidemic of obesity,” said one of the researchers, Dr. George A. Bray, a longtime obesity scientist with Louisiana State University System’s Pennington Biomedical Research Center. He noted the research didn’t prove a definitive link.
I like the hedging–the link isn’t “definitive.” No, I guess it wouldn’t be. Obesity is surely also “linked” to the Iran hostage crisis and the stagflation of the late ’70s and early 80s. Maybe I shouldn’t be so skeptical. The study may be a little more scientific than merely looking at correlation rather than causation. But if the research is right, it will be easy to make America thin again. Just ban those high fructose sweeteners. One problem with this will be explaining why the advent of low calories sweeteners didn’t stem the tide of fat that allegedly threatens to overwhelm us.
My theory is that we’re fat because we enjoy it. We like food. It gives us pleasure. We’re wealthy and food’s cheap so we’re taking on a few pounds. Alex points out that the entire increase in weight over the past several decades can be explained by an extra Three Oreo Cookies a day! Here is a paper by Glaeser, Cutler and Shapiro that takes the economists’ approach to weight gain.
Here’s my take on the claim that we should tax fatty foods because of the externalities.
Can suicide be rational?
Carolyn G. Heilbrun’s suicide this past October could not have come as a great surprise to her family and friends. After all, the 77-year-old former Columbia University literature professor and mystery author [pen name Amanda Cross] had written for years about her plans to kill herself.
Heilbrun was suffering from none of the conditions commonly associated with suicide when she evidently took an overdose of pills and put a plastic bag over her head. She was neither terminally ill, in severe pain nor, apparently, depressed. Instead, she committed what some have called “rational suicide” — ending one’s life out of a conviction that one has lived long enough, that the likely future holds more pain than joy.
Rational suicide, a coinage dating back nearly a century, has also been called balance-sheet suicide, suggesting that sane individuals can objectively weigh the pros and cons of continued life, and then decide in favor of death.
Read the whole story. (You will note that The Washington Post has new registration procedures, it takes no more than a minute, and we link to them frequently, you are encouraged to register.) Or sometimes you may attempt suicide to get more attention and resources from other people.
I am a skeptic, and unlike many economists I am willing to point The Finger of Irrationality. Consider the following:
Heilbrun’s decision [is] such a disturbing one, says suicide expert John L. McIntosh, chairman of the psychology department at Indiana University South Bend. Even someone making what appears to be a thoroughly rational case for suicide, McIntosh says, can be suffering from depression or cognitive rigidity, an unwillingness to consider other options. Health professionals, he stresses, should be diagnosing and then treating such individuals.
So what happened?
Heilbrun…had been especially open about her plans. In her 1997 book, “The Last Gift of Time,” she described life after age 70 as “dangerous, lest we live past both the right point and our chance to die.”
Two concerns that Heilbrun mentioned were her “inevitable decline” and becoming a burden on others. Her motto, she said, was, “Quit while you’re ahead.” But though she was then 71 years old, Heilbrun chose not to act — not yet. Her sixties, to her surprise, had been a source of astonishing pleasure. She wanted to keep writing, enjoy her family and friends, spend time in a new home and keep certain “promises.”
In the July 2003 issue of the Women’s Review of Books, however, Heilbrun wrote that she feared “living with certainty that there was no further work demanding to be done.” She had consented to life, she stated, “only on the terms of borrowed time.”
On Oct. 9, 2003, Heilbrun was found dead in her New York apartment, having committed suicide. A nearby note read “The journey is over. Love to all.”
My take: I plan on hanging on until the bitter end. Perhaps that is why I cannot so easily imagine a rational suicide, apart from cases of extreme pain and terminal illness.
Is risk-aversion bad for you?
It is bad for rats, or so it seems:
…new research published in the Proceedings of the National Academy of Science shows that caution can actually kill you. Sonia Cavigelli and Martha McClintock of the Department of Psychology and Institute for Mind and Biology at the University of Chicago found in a recent experiment that individuals who fear novelty–a condition scientists have named “neophobia”–are likelier to die at an earlier age than those who are unafraid of change. It is the first time, says Cavigelli, that a study has demonstrated that an emotional trait that shows up in infancy can shorten life span.
For this research, Cavigelli and McClintock followed the lives and fortunes of pairs of rat brothers for several years. The scientists chose their subjects by first establishing which of the rats were neophobic. To do this, they placed the young rats inside a bowl in a small room. Objects the rats hadn’t seen before–a rock, a metal box, and a plastic tunnel–were placed in each corner of the room. The rats the scientists deemed neophobic either stayed hunkered down in the bowl or left it only hesitantly, with hunched backs, stilted walks, and bristling fur. The rats who left the bowl quickly to explore the room and the various unfamiliar objects were dubbed neophilic.
And the results? These risk-averse rats showed a consistent pattern of stress throughout their lives and died at earlier ages. What does this mean for people?
A number of parallels exist between humans and their rat surrogates. Neophobia shows up in human infants as early as 14 months of age, and like the rats, fearful children have a faster and stronger hormonal response than children who are not afraid of new situations. It’s also been shown that if you are neophobic at a young age, you tend to remain that way throughout childhood. Cavigelli suggests, however, that individuals may develop strategies to avoid the negative effects of neophobia. “If you are a neophobic-type person, you might avoid any novel situations thereby minimizing that stress,” she says. Staying away from stressful situations could be a form of “self-medication.”…The wear and tear of stress hormones can cause neophobes to get sick more quickly, suggests Cavigelli. So if you know you’re a neophobe–and therefore more vulnerable to any bug going around–you might want to be seek medical intervention promptly in the case of illness.
Although it looks like the neophiles have an unfair advantage, they may not have it as good as it seems. In the experiment, Cavigelli and McClintock played God by controlling the environment of their subjects and essentially creating a safe universe where being brave didn’t get you into trouble. But real life, with its car accidents, plane crashes, and human predators does not always reward the fearless. Human neophiles might also have longer lives if we were all just rats in a cage.
The researchers suggest that it makes evolutionary sense for mothers to have emotionally diverse litters. In other words, there is an evolutionary reason why some but not all teenagers can act like such foolish idiots. See Slate.com for the full story.
Who are the top Marxists?
Here is the result of one survey, thanks to www.crookedtimber.org. First place goes to Rosa Luxembourg, I suppose that Marx himself is out of the running by definition.
Why is she number one? Could it be because of her violent murder in 1919, which both martyred her, and likely prevented her from later endorsing totalitarian regimes?
You will note that numbers three (Lenin) and seven (Mao) on the list are mass murderers, don’t neglect to follow this link to Bryan Caplan’s award-winning site on the communist slaughter of innocents.
I don’t want to go on record as, well, “pushing” for Stalin, but I can’t help noticing that he doesn’t even make the top thirty. There is, after all, a book called The Essential Stalin, on his theoretical contributions. Nor can it be said that mass murder is an immediate disqualification from doing well on the list. Note that the creator of this poll, who calls himself anti-communist, is both highly intelligent and honest in his writing. He questions whether a poll of “top Nazis” would be no less legitimate, remarking that “greatness” and “goodness” are not the same thing.
My question: Would they have let me vote for David Horowitz?
What is in a voter’s self-interest?
Alan Krueger reports on survey research that shows that people do not vote according to their self-interest. In particular, he bemoans the fact that a majority of the poor want to get rid of the estate tax. This and other odd results are due to “ignorance and uncertainty” says Larry Bartels, a Princeton political scientist. If only the poor were better informed they would vote against tax cuts for the rich. Moreover, a better informed electorate would be a good thing. I take issue with both of these positions.
Take the normative position first. Assuming that voters voted self-interestedly, would a more informed electorate be a good thing? Doubtful. If everyone voted their “interest,” as Krueger and Bartels conceive it, every bureaucrat, welfare recipient and old person living on social security would vote for more government. Naturally, I think this would be a disaster but even those who think this would be a good thing ought to give pause when they consider how much more polarized our society would become were it not for the fact that ideology cuts across class lines.
Moreover, isn’t it interesting that when the poor vote against their “self-interest” they are labeled “uninformed” – Bartels compares them to Homer Simpson. But when Hollywood liberals like Barbara Streisand or rich philanthropists like Bill Gates Sr. vote against their “self-interest” they are called enlightened. What Krueger and Bartels refer to as self-interest is actually masking an ideology.
Is it true that informed voters would vote differently? (Krueger cites some evidence suggesting that in fact this is not the case – at least not as much as one would expect – but he doesn’t offer an explanation.) To understand this one should first realize that voters are uninformed because it doesn’t pay to be informed. The probability that one vote sways the election is infinitesimal so voters are rationally ignorant. Does this imply that voting is random? Not at all. Voters who care about ideas even a little are free to vote their ideology at low cost. Thus, in my view, the fact that votes don’t matter gives us hope. It’s only because votes don’t matter that libertarianism has a chance of success. Of course, I recognize that the same facts gives socialism a chance at the polls but I hope good ideas will win out.
Addendum: I’ve been influenced on these issues by our colleague, Bryan Caplan – although I give the ideas a more positive spin than he does. I recommend his paper Libertarianism Against Economism: How Economists Misunderstand Voters, and Why Libertarians Should Care from The Independent Review and his other papers on rational irrationality which you can find on his web page.