We Need More Like Him

Here is a guy I can respect, Arthur Seldon:

A classic liberal
In many ways Mr Seldon was a quintessential Thatcherite, if never a Conservative. He was born in the East End of London, to Russian-Jewish immigrants, but lost both parents in the 'flu epidemic of 1918, when he was three. Adopted by a cobbler, learning to repair shoes himself, he became a natural and lifelong believer in self-help. He won a state scholarship to the London School of Economics, where he was inspired to his life's work by Hayek, who was one of his tutors.

Rather than a Tory, Mr Seldon was essentially a classic liberal. Much of his early life was devoted to trying to revive the Gladstonian roots of the Liberal Party, even as it succumbed to the influence of Keynes and others. He always regretted that it was the Conservative Party that took up the IEA's agenda, not the Liberal Party, where his free-market ideas really belonged. This marked him out from most Thatcherites, who, much as they adored economic freedom, often had a Tory dislike of individual liberty in other spheres.

Keywords: Classic Liberal

Minimum Wage

A student asked me the other day about what the current minimum wage was, and given it has recently changed in Wisconsin, I didn't know.

The Federal Minimum Wage is still $5.15 an hour. Wisconsin's is currently $5.70 an hour for adult employees. The other states can be found here.

I wasn't 100% sure what happened to the local minimum wage proposal, but it looks like it passed. According to the article:

The council's action will raise the minimum wage from $5.15 per hour to $5.70 per hour as of Dec. 1, and $6.50 per hour as of Dec. 1, 2006.

It looks like I need to write an op-ed covering the research on this. But I just discovered the story behind the minimum wage is worse than one might think, I should have figured. From the Marginal Revolution:

It's no surprise that progressives at the turn of the twentieth century supported minimum wages and restrictions on working hours and conditions. Isn't this what it means to be a progressive? Indeed, but what is more surprising is why the progressives advocated these laws. A first clue is that many advocated labor legislation "for women and for women only."

Progressives, including Richard Ely, Louis Brandeis, Felix Frankfurter, the Webbs in England etc., were interested not in protecting women but in protecting men and the race. Their goal was to get women back into the home, where they belonged, instead of abandoning their eugenic duties and competing with men for work.

Unlike today's progressives, the originals understood that minimum wages for women would put women out of work - that was the point and the more unemployment of women the better!

Update: I forgot about this. Wal-mart has asked Congress to raise the Minimum Wage. The Division of Labour Blog has a nice synopsis of their motivation, though they say it is to increase the income of their customers, research shows it does not. From an NBER working paper:

The evidence indicates that workers initially earning near the minimum wage are adversely affected by minimum wage increases, while, not surprisingly, higher-wage workers are little affected. Although wages of low-wage workers increase , their hours and employment decline, and the combined effect of these changes is a decline in earned income.

Keywords: ECO120, Price Floor, Min. Wage

Skin Cancer

I just found out I have skin cancer. Maybe I shouldn't have had a biopsy done on that tumor?

This article makes the argument that we can actually screen too often. Because once you have find a tumor you have to operate, and since people die during operations all the time, some people may well have been better off not knowing they had a tumor.

During his 14-year career at Dartmouth, Black has become nationally known and respected as one of the most vocal radiologists when it comes to questioning screening tests. He has coauthored numerous papers on the topic, often with Welch, and served on several National Cancer Institute (NCI) committees, including the 1993 International Workshop on Screening for Breast Cancer, which concluded that there is no proven benefit from mammography for women in their forties.

In his book, Welch offers some advice to those who are concerned about being overdiagnosed. Probably the best way to minimize the harmful effects of screening is to be willing to take some timeÂ? with the small, questionable abnormalities, he writes. Even when 'cancer' is agreed on, it may make sense to wait and be sure the cancer is really growing.Â? Watchful waiting, as the wait-and see strategy is called, can be hard for patients and doctors alike because in some ways, just like screening, watchful waiting is a gamble.

Hopefully when I go to my dermatology appointment they won't kill me with some treatment.

A Good Choice

Delong is reporting via reuters, that the President will announce Ben Bernanke as Greenspan's replacement as the Chair of the Federal Reserve Board of Governors.

Finally the President does something right. I wonder if this will bring us closer to Inflation Targeting?

Update: Cafe Hayek is reporting (tongue in cheek) that Bush really nominated his personal accountant.

Keywords: ECO301, ECO120, ECO305

Grade Deflation at Princeton

Well it looks like Princeton has been able to bring average grades down with their new policy. The press release discusses the benefits this policy has had by giving those in the softer disciplines a spine. I mean an ability to "call them as they see them".

In English, to take another example, the approach was to use the new grading expectations to enhance rather than abridge the ability of the faculty to employ their own expertise and experience to make informed grading decisions. The chair suggested to the faculty "that we view the policy as a tool to help us call grades as we see them and to resist the impulse to award high and higher grades for work we know is undeserving. Together we agreed that no one knew better than faculty themselves how to evaluate their students' work, and we decided that each faculty member would keep the expectations in mind and be trusted to do the right thing. Before mid-terms and once again before finals, colleagues were reminded via email of the new guidelines. We also distributed to faculty and preceptors guidelines about the meaning of particular grades, and we scheduled a special meeting with preceptors to discuss these. Upon reviewing the grade sheets in January, I concluded that efforts had indeed been honestly made to lower grades and we would stay this particular course."

Commenting on the results for 2004-05, Dean of the College Nancy Malkiel congratulated the faculty on making significant headway in implementing Princeton's new institutional grading expectations. "Many departments are at or very close to the desired standards; in others, while there is more work to be done, the progress made in a very short time has been nothing short of remarkable. Culture change is hard to achieve, and we always imagined that it would take several years to implement the new grading expectations. We are clearly on our way."

Keywords: Grade Inflation

Resisting Change Will Cost You Money

Google's CEO, Eric Schmidt has a great opinion piece up over at the WSJ. Thanks to Mark Thoma for the link. He talks about the resistance of publishers to allow Google Print to index their books, despite the likelihood of increasing their sales.

Even those critics who understand that copyright law is not absolute argue that making a full copy of a given work, even just to index it, can never constitute fair use. If this were so, you wouldn't be able to record a TV show to watch it later or use a search engine that indexes billions of Web pages. The aim of the Copyright Act is to protect and enhance the value of creative works in order to encourage more of them -- in this case, to ensure that authors write and publishers publish. We find it difficult to believe that authors will stop writing books because Google Print makes them easier to find, or that publishers will stop selling books because Google Print might increase their sales.

Indeed, some of Google Print's primary beneficiaries will be publishers and authors themselves. Backlist titles comprise the vast majority of books in print and a large portion of many publishers' profits, but just a fraction of their marketing budgets. Google Print will allow those titles to live forever, just one search away from being found and purchased. Some authors are already seeing the benefits. When Cardinal Ratzinger became pope, millions of people who searched his name saw the Google Print listing for his book "In the Beginning" (Wm. B. Eerdmans) in their results. Thousands of them looked at a page or two from the book; clicks on the title's "Buy this Book" links increased tenfold.

Doe this sound familiar? Maybe if a publisher said: "Google Print is to the printed book as the Boston strangler is to a woman home alone!". Thats what Jack Valenti said of the VCR.

"I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone," he argued in congressional testimony.

Valenti is often chided for the infamous quote, but he maintains it was a rhetorical statement intended to persuade Congress to give the industry a copyright royalty fee for every video produced. The Supreme Court ruled against Universal's and Sony's attempt to ban the VCR, and home-video sales now account for more than 50% of Hollywood's revenue.

It seems that at every turn, those who earn money from creative industries with copyright protections vehemently resist new technology. Look at the RIAA and P2P technology. Do we really think on net it destroys the urge to create? Porn has been way out in front on this. They embraced the vcr, and were the only ones making money in the early days of the internet. I think these publishers are just missing the boat. Or maybe the publishers realize that the technology may cut them out of the revenue steam, and the creators and the consumers will benefit. I need to think about this more.

Anyhow David Levine maintains a useful page on intellectual property and copy right issues here.

Mark my words, Google will rule the world, despite what Adam L. Penenberg says.

Some Quick Links

Hamilton has a good post on the importance of savings here.

Thoma has a great post on Poole's speech on monetary policy rules here. I need to use this in my Money and Banking class, and maybe even my principles class.

I also need to write an op-ed for the local paper on the topic of funding education. Mark Thoma makes an excellent point about the problems associated with decreased state support, but not decreased state regulation in this post.

Keywords: Education, Rules, ECO301, ECO120

Whose Rules?

Mike Sheffler of posts a comment on my last entry. I quote:

I could be off my rocker, but I was under the impression that the ... uh ... talent has always been obligated to maintain a four-foot clearance from the customer in Washington.

I'm from Spokane, and the sentiment there was that Washington strip clubs were lame because the girls always had to maintain that distance. Hence, everyone would flock to the Stateline strip club, situated just barely on the potato side of the Washington/Idaho border, where there was no such mandatory spacing.

Actually, it is determined entirely by local municipalities, subject to the usual First Amendment constraints. In California v. Larue the majority held that exotic dancing operates on the periphery of First amendment protections. Therefore any restrictions on it must satisfy strict scrutiny and be time, place, manner and content neutral. So how are buffer zones content neutral? I mean we don't require waitresses or hairstylists to maintain a buffer zone. Well the buffer zone ordinances have been found legal by the "Liberal" 9th Circuit Court of Appeals in their Colacurcio v. City of Kent decision where they found the bufferzones to be insignificant restrictions on speech, which do not fundamentally alter the message the dancer is trying to convey.

They were merely following the lead of the Supreme Court who felt in Barnes v. Glenn Theatres that wearing G-strings and pasties did not alter the expressive content of the speech and therefore was a minimal intrusion on the First Amendment. But then what justifies the need for buffer zones? The municipalities interest in preventing secondary effects. Souter was the first to apply the doctrine to nude dancing in Barnes v. Glenn Theatres, but it was later extended by the rest of the court in City of Erie v Pap's A.M. , ironically much to the chagrin of a remorseful Justice Souter.

Keywords: Buffer Zones, Secondary Efects

The War Marches On...

Looks like the War on Porn continues. Chris of nowthatsfuckedup.com (nsfw) is sitting in the slammer for allowing people - subscribing members - to post pictures to his servers which are located in Amsterdam. I'm quite sure this is payback for this story. I can't imagine this has a snowball's chance in hell of holding up. I've checked out the site, there is nothing that I've seen that remotely approaches a modern definition of obscene. It is clearly a case of harassment.

And on the exotic dancing front, we can now add L.A. to the parade of towns, like Seattle attempting to impose a rule requiring dancers to maintain a 4 foot buffer from their customers. Imagine what getting a haircut would be like if they had to operate under these laws?

Nobel Prize

This morning brings news of the Nobel recipients in Economics. Or more correctly, the Bank of Sweden prize in memory of Alfred Nobel. The winners are Thomas Shelling and Robert Aumann. This is another win for Game Theory. Here is a good synopsis by the selection committee.

There are good discussions of Shelling and Aumann over at Marginal Revolution.

Keywords: Nobel Prize, Game Theory

More Savings or Less?

In the long run more savings, means more investment, which means a larger capital stock, which means higher output in the future. In the short run model an increased desire to save means less consumption, which means less output through the multiplier effect. This is often a little confusing, but can completely justified.

James Hamilton has a more in depth explanation here.

Keywords: ECO120, ECO305

The War Begins

The first shot in the War on Porn was fired by the AG's Porn Squad, with a raid on Max Hardcore.

Max released a statement through his attorney:

“Once again, the government is wasting tax dollars and otherwise invaluable law enforcement resources to try to force a minority view of morality on all of America. Five of my movies have been targeted by the Federal Prude Patrol. There is no indication of any crime to be alleged except obscenity. If indicted, I will fight to protect my liberty, as well as the liberty of consenting adults to watch other adults engage in lawful, consensual, pleasurable sexual action. Shame on the Bush Department of Justice. I am proud of the movies I make and proud of those who buy and sell those movies.”

Keywords: Porn, Obscenity

Give Me Liberty or Give Me Death

Or maybe that should read In Death Give Me Liberty? It appears as though Roberts has wasted no time in showing his true colors as a Bush conservative. By that I mean someone who is conservative for religious reasons, not historical ideological reasons.

Although one should be cautious when interpreting a Supreme court Justice's questions, it appears Roberts is no champion of States rights. In the doctor assisted suicide case testing Oregon's voter backed alteration of federal drug laws.

Roberts repeatedly raised concerns that a single exception for Oregon would allow other states to create a patchwork of rules.

"If one state can say it's legal for doctors to prescribe morphine to make people feel better, or to prescribe steroids for bodybuilding, doesn't that undermine the uniformity of the federal law and make enforcement impossible?" he asked.

Ahh...John...it's called states rights. Maybe the feds shouldn't be enforcing federal drug laws? I guess we know where he would stand on the Marijuana case

After reading this I'm starting to like Thomas even more. He is a predictable states rights guy. And while I'd be in favor of more federalism, if I got to decide what it looked like, I think the better approach is to let the tyranny of the majority reign on a state level, that way there might be the option of finding a state whose laws match your preference. So I'm moving to Oregon, not Seattle.

On another Supreme Court Note, I have read a lot of criticism of the Meirs nomination, for a good list check out the Volokh Conspiracy.

Keywords: Supreme Court

Sons of Provo

Porn is often regulated under the guise that there is a chance some unknowning innocent person might accidently see it. You know, like religious zealot that accidently goes into an adult bookstore and accidently buys one(note the sarcasm). It turns out accidents do happen, though even in this case I'm not sure the people accidently viewed pornography, so much as a movie about a porn actor. Here is the rather humorous story.

SALT LAKE CITY Copies of a movie aimed at a Mormon audience have been pulled from store shelves after a recording mix-up left buyers watching ``Adored: Diary of a Porn Star'' instead of the squeaky clean ``Sons of Provo.''

The PG-rated ``Sons of Provo'' chronicles the life of an LDS boy band, Everclean, on its relative journey to stardom.

``Adored: Diary of a Porn Star'' is an unrated independent film that is not pornographic, said Corey Eubanks, spokesman for Wolfe Video, the largest distributor of films featuring gay and lesbian characters and stories. However, the film does contain sexual situations and its subject is the life of a gay porn star.

Keywords: Porn

Trailer Parks are a Bad Idea

So this has been traveling the blogosphere for a bit, but I wanted to put some links here. I think this is a great example of Economists being ignored, despite our near unanimous agreement. Much like we are ignored despite our agreement on trade.

The Bush administration is looking to build trailer parks to house Katrina and Rita victims. There are several reason that his is a bad idea a very bad idea, and economists almost universally endorse the alternative of offering housing vouchers. You need look no further then the failure of public housing projects throughout the country to see why trailer parks might be a bad idea, but even more applicable is the FEMA housing project constructed in the aftermath of hurricane Charley.

"FEMA City is now a socioeconomic time bomb just waiting to blow up," said Bob Hebert, director of recovery for Charlotte County, where most FEMA City residents used to live. "You throw together all these very different people under already tremendous stress, and bad things will happen. And this is the really difficult part: In our county, there's no other place for many of them to go."

"Having lived through the last year here, this is my advice to New Orleans and the other Gulf Coast towns: Don't make big camps with thusands of people, because it doesn't work," Hebert said. "It takes a bad situation and, for many people, actually makes it worse."

Here is Mark Thoma's take on the issue. Marginal Revolution also passed on this recommendation by Ed Olson

Instead the idiots are talking about renting cruise ships, building mobile home parks - or worse yet - converting steel shipping containers. All of this despite the enormous availability of vacant rental units. As Ed Olson points out:

The rental vacancy rate in the United States is at a historically high level. For all metropolitan areas as a group, it is over 10 percent. The largest metropolitan areas in the south central region have some of the highest vacancy rates Â? 15.6 percent in Houston, 14.4 percent in San Antonio, 12.8 percent in Dallas, 12.2 percent in Memphis, 13.1 percent in Birmingham and 18.5 percent in Atlanta. Vacancy rates for smaller metropolitan areas and non-metropolitan areas are also at historically high levels. In short, many rental units in the south central region and throughout the country are available for immediate occupancy by people with the ability to pay the rent.

Keywords: ECO120, ECO305, Subsidies