Tuesday, November 27, 2007


I was just interviewed for a piece on WSLU/WPR concering this article in the Journal Sentinal.
According to the Legislative Fiscal Bureau, the state had $8.28 billion in general-obligation, transportation and environmental debt in mid-2006; the same debts totaled $4.41 billion in 1996.

The 87% increase was three times the U.S. inflation rate over that period.

Figures show that debt rose the most - by $1.8 billion- under Thompson between 1996 and 2001, when he resigned to become a cabinet secretary for President Bush. Debt increased by more than $1.5 billion in Doyle's first three years.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said the growing debt is another risky budget decision governors and legislators have made to benefit themselves politically.

Also rising is annual debt-service payments on those bonds: Principal and interest payments on general-obligation bonds will exceed $700 million for the first time this year; and payments on transportation bonds will cost an additional $174 million.

That $874 million is cash that can't be used for other important programs. By comparison, that amount is close to what it cost to run the state's prison system last year.

There are two real issues. The first is that the increase in bonding burdens future generations, which is alright if they are the ones who benefit. The second issue concerns the state's bond rating. As it falls debt service costs rise, crowding out other budget items.

The article could have been improved by publishing the debt as a percentage of the state economy, as it has grown by 50% over the last 9 years. That makes the outstanding debt about 2.9% of Gross State Product in 1997 and about 3.6% in 2006. Not exactly an enormous increase.


Some evidence that my prognostications were correct:
The areas studied, and the gross metropolitan product growth expected next year, include Appleton at 2.7 percent, Duluth, Minn.-Superior 2.6 percent, Eau Claire 2.8t, Fond du Lac 3.1, Green Bay 2.9, Janesville 3.3, La Crosse 3.1, Madison 3.4, Milwaukee 2.5, Oshkosh 2.7, Racine 2.3, Sheboygan 2.6 and Wausau 2.6.

Diffley said the result is better in Wisconsin because area prices and mortgage values did not climb as much or as rapidly as in other parts of the country.

Even a blind squirrel finds an acorn once and awhile.

Tuesday, November 20, 2007

Sex Ed

The Freakonomics Blog has an excellent post on abstinence education.

Turn now to the United States, where the Federal Government has spent upwards of $1 billion over the last decade on abstinence-only sex education. (Call it defensive dating.) The idea is that not teaching students about contraception, safe sex, etc., will lead to better outcomes, including less unwanted pregnancies and fewer sexually transmitted diseases.

Except … it turns out that teenagers are circumventing their abstinence education and having sex anyway. Studies have repeatedly shown that abstinence-only students have almost the same number of sexual partners, and have sex almost as early, as students who receive traditional sex ed. In fact, abstinence-only programs may actually increase the risk of STDs and unintentional teen pregnancies. That’s because those abstinence-only students who do have sex tend to be less likely to use protection.

That’s one of the reasons why New York State recently canceled its abstinence-only program, passing up millions of dollars in Federal aid. Congress nevertheless appears ready to continue funding for similar programs. Maybe abstinence-only would work better if the classes were administered by one of those stern South African driving examiners.

Wednesday, November 14, 2007


Dr. Giddings has recently posted on her bailiwick, gender issues (here and here) . Though its not exactly my area of study, I'm always interested in research on gender differences. I'm incredibly lucky to have a colleague like Lisa who will thoughtfully discuss these issues and not react the way Harvard's faculty did to Larry Summer's musings on gender. So with that preface I'll share some controversial recent research. The first piece, by Cawley and Liu , use time use data to identify the source of maternal employment's impact on increasing childhood obesity.
Recent research has found that maternal employment is associated with an increased risk of childhood obesity. This paper explores mechanisms for that correlation. We estimate models of instrumental variables using a unique dataset, the American Time Use Survey, that measure the effect of maternal employment on the mother’s allocation of time to activities related to child diet and physical activity. We find that employed women spend significantly less time cooking, eating with their children, and playing with their children, and are more likely to purchase prepared foods. We find suggestive evidence that these decreases in time are only partly offset by husbands and partners. These findings offer plausible mechanisms for the association of maternal employment with childhood obesity.
The second, by Noam Kirson, concerns how female labor force participation shortens the life of their male spouses.
This paper finds a strong positive correlation between female labor force participation and negative health outcomes for middle-aged men and women, and suggests that this correlation is mediated by household-level stress. At the cross-country aggregate level, I show that labor force participation of women is associated with increased mortality rates among both men and women. At the individual level, I find that married men whose spouses work are more likely to die within 10 years, to have high blood pressure and to self-report worse health outcomes. The findings do not appear to be the result of reverse causality. The mortality effects, both aggregate and individual, are especially large for deaths from ischemic heart disease, while weak to moderate for cancer. These findings match well with the medical evidence on the link between stress and health.
Of course this isn't the only mechanism by which women can shorten men's lives. They also "make" us do stupid, crazy things. Don't forget male life expectancy is much shorter than women's due largely to the increased likelihood of death from accident. We are the risk takers, and I mean that in the physical sense. From The Economist:
Chasing females can take years off life

IN THE cause of equal rights, feminists have had much to complain about. But one striking piece of inequality has been conveniently overlooked: lifespan. In this area, women have the upper hand. All round the world, they live longer than men. Why they should do so is not immediately obvious. But the same is true in many other species. From lions to antelope and from sea lions to deer, males, for some reason, simply can't go the distance.

One theory is that males must compete for female attention. That means evolution is busy selecting for antlers, aggression and alloy wheels in males, at the expense of longevity. Females are not subject to such pressures. If this theory is correct, the effect will be especially noticeable in those species where males compete for the attention of lots of females. Conversely, it will be reduced or absent where they do not.
The best thing I have read on the evolutionary psychology/biology of gender differences is this speech by Roy F. Baumeister (here). Read and discuss, preferably with the opposite sex and preferably in a room without sharp objects.

Monday, November 12, 2007

Economics in Movies and Music

Many economic principles and ideas appear in modern music and movies. Here you can find a list of movies and their principles and here you can find a weblog dedicated to discussing the economics in music lyrics.

The website for educators discussing the use of these methods is here.

Monday, November 05, 2007


Its important to be able to discern truth from fiction or at least filter out the ideology. David Leonhardt helps in his column on taxes.

The top earners pay a bigger share of the government tab than in the past because their incomes have risen so sharply — even more sharply than their tax bills. (Mr. Fleischer was able to claim the opposite by looking only at income taxes.)

The affluent, in short, are paying less in taxes on every dollar they earn but earning many more dollars.

And despite what some politicians say, not even conservative economists believe tax cuts are self financing. There is no such thing as a free lunch. As James Surowiecki points out:
How much of an impact tax rates have—and how high taxes have to get before they have an impact—is a subject of much debate in economics, but it’s inarguable that they do matter. What supply-siders have done is start with that reasonable idea and extrapolate it to unreasonable lengths.

It’s the comparison between actual tax revenue in 2007 and what tax revenue would have been in 2007 had there been no tax cuts in 2001. And studies that make these types of comparisons—including one by Bush’s own Treasury Department that looked at the tax cuts’ impact on economic growth—find that government revenues would be greater had taxes not been cut.

I use to call myself a supply sider, but stopped years ago when the tax cut nuts laid claim to the name.