Sunday, September 29, 2013

Assorted Links

1. Record number of Americans giving up their citizenship because of new tax law.


This has nothing to do with avoiding taxes. I was never in danger of having to pay taxes in the US since I pay more here. The issue for me was that it was becoming harder and harder to follow the tax code and comply. It was difficult already but when I knew Fatca was coming, I thought, 'Do I want to go through with it anymore?'

Fargo has more 200 ft. commercial buildings than our nation’s capital. This strange outcome is due to the district’s outdated building height restriction. Originally passed for fire safety, the law became antiquated with the invention of sprinkler systems.

3. The case for Obama's joking during the Navy yard shooting being the most tasteless presidential moment  ever.

I'm curious: what other presidential acts might be on the list for most tasteless?

Friday, September 27, 2013

Review of The Social Costs of Fracking by Food and Water Watch

Food and Water Watch released a study on the negative consequences of fracking.

This study asks some good questions.  However, any study done by an organization called "Food and Water Watch" obviously isn't objective.  This organization actually would like to ban fracking.  I've only done a quick review, but I have a couple questions/concerns:

The authors claim:
1. "Fracking is associated with more social disorder arrests: Disorderly conduct arrests increased by 17.1 percent in heavily fracked rural counties, compared to 12.7 percent in unfracked rural counties."
Is this percentage increase controlling for the increase in population?  Heavily fracked counties would have greater population growth. With a greater population, you'd expect more disorderly conduct arrests.  Especially when they're young men.

That being said, I've heard anecdotal information of more bar fights in towns where there is a lot of fracking, so this wouldn't shock me if it holds, even after controlling for the population.  We don't have enough information yet to know, however.

The authors also claim:
2. "Fracking is associated with more cases of sexually transmitted infections: After fracking, the average increase in chlamydia and gonorrhea cases was 62 percent greater in heavily fracked rural counties than in unfracked rural counties."
Once again, does this control for the population of younger people of young men in the areas?  More younger people, more STIs, right?  Further, this seems to be a cost that is mainly borne by the individual who contracts the STI, right?  It really doesn't concern me whether a person has an STI, as that doesn't impose a cost upon me. Economists would call this a private cost.

Without controlling for the population, it could be that the percentage of these cases, while increasing, is increasing at a smaller rate than the population of young people!  It could be that fracked counties actually have a lower STI/population rate!  Further, what does a 62% increase mean?  It could mean three more people, right?  Or does that mean an additional 0.02% of the overall population?  The report doesn't explain.

Related to this, the authors of this study use actual numbers at times (reporting on driving crashes), but only display the percentages at other times (STIs).  This weakens their credibility.

I would also like to know what other factors the authors examined but found no social costs in "fracking counties"?  In theory, if the authors assess 40 items (like health outcomes, property values, etc.), and they could only find two or three where there were negative consequences, the social "costs" of fracking, might actually be better labeled as the social "benefits" of fracking.

I respect that this organization is attempting to answer tough questions.  Objective research on the costs/benefits is needed.  This organization isn't creating objective research, however.

Thursday, September 26, 2013

WKOK story on "Rousu vs. Casey" debate Obamacare

Link here.

As Obamacare continues to be an issue for debate in Washington, two local folks gave their differing views on WKOK Thursday morning. Susquehanna University economics professor Matt Rousu is opposed to Obamacare. He gave an example of a letter he received from a woman that had her insurance plan automatically changed to a plan that fits the Obamacare requirements.

Note that I didn't actually "debate" Casey.  He was on the radio early this morning, and I was interviewed between 9:00 AM- 10:00 AM.  I'll post my full interview soon.

Two links to minimum wage discussions ...

John Cochrane discusses

The article has a nice analysis.  It even uses an example I use of who will benefit from a minimum wage increase. (With machines replacing human workers.)  An excerpt from the beginning ...
The lady who took my order must have been about 19, as were all the other employees I could see, and pretty clearly new on the job.  Getting the order right took some effort.  I made the mistake of paying cash. The bill was something like $7.62. I first offered a $10, and she rang it up. Then I found 12 cents in my pocket, and offered it. This was a big mistake, as the cash register had already computed my change, and adjusting to my offer of 12 cents was beyond her abilities. 

Greg Mankiw discusses

He discusses a new academic paper that shows that minimum wages can be efficient - under implausible assumptions.  He concludes:
Rather than providing a justification for minimum wages, the paper seems to do just the opposite. It shows that you need implausibly strong assumptions, such as efficient rationing, to make the case.  I cannot see any compelling reason to believe that in the presence of excess supply of workers, the market will somehow manage to efficiently ration the scarce jobs.

Wednesday, September 25, 2013

Forbes and Foxnews on the impact of Obamacare

Forbes on premium price increases from Obamacare

Obamacare will increase underlying insurance rates for younger men by an average of 97 to 99 percent, and for younger women by an average of 55 to 62 percent. Worst off is North Carolina, which will see individual-market rates triple for women, and quadruple for men.

Foxnews on impact of Obamacare

The average American will be paying $328 per month for mid-tier coverage under the new law, without subsidies.

This is going to get ugly.

Tuesday, September 24, 2013

The impact of Obamacare ... one person's story

This was a status update that my brother shared on facebook (this isn't my brother talking, he just shared the status) ...

So I got a letter from Bluecross Blueshield, my health insurance provider, on Saturday. It explained that my current plan, the plan I chose to fit my individual needs, does not comply with Obamacare and thus had to be cancelled. It went on to say that I shouldn't worry because I had been automatically moved to new plan that does meet the new Obamacare requirements. The details of my new plan are just excellent. My deductible went from $1500 up to $2500, that's 66%. My limit on annual out of pocket expenses went up from $1500 to $6350, up 323%. I'm now covered for a bunch of things I don't want or need, like mental illness inpatient and substance abuse inpatient treatment coverage. Now a rational person might assume that when something I chose to buy, and wanted to keep was taken from me, it would at least cost less to pay for the thing that was forced onto me. Well that's the best part! My monthly premium went up from $139.50 to $229.19, an increase of 65%! I get to pay MORE for something I don't even want...

This is sick.  I fear what will happen once all the regulations are put into place.

Didn't our elected leaders learn enough from the fall of communist countries to know that the economy is too complex for the government to control?  The laws need to be changed to limit special deals for insurance companies, limit the right to sue, and more.  Less government control and more competition - not the opposite.

I wonder ... will those who voted for Obama help those of us who didn't pay for Obamacare?  Somehow I doubt that will be "change they can believe in".  

Upcoming radio interview - this Thursday

I'm going back "On the Mark" on Thursday morning.  I'll be on from about 9:00-10:00 AM.

You can listen (or watch) here.

Assorted Links

2.  Remembering Obama for being an opportunistic Senator.  As president he advocates the "do as I say, not as I do" approach.  Especially when dealing with the debt ceiling.

3.  A really nice letter about economic impact studies on events hosted by cities.

One of the major issues is that the standard method to measure economic impact analysis is problematic. It only accounts for the additional money brought into the community without taking into account the costs and crowding out effects created by the event.
As such, a standard economic impact analysis will always be positive. In contrast, a cost-benefit analysis is founded on the principles of welfare economics.

Monday, September 23, 2013

Three fracking links

1. Energy companies giving up on NY.

I don't blame them.  Why try in NY when so many states are open to fracking?

2.  A call for a moratorium on new fracking permits in PA.  


3. A call for a 6-month moratorium on fracking in Arkansas.

For those proposing the moratoriums, I would like them to answer the question, "what specific results would cause you to advocate lifting the moratorium in the future?"  I fear that the response would be "that fracking is safe" or some similar answer without quantifying what results would make them think it is safe.  (Remember, 20 years after GM foods, there are plenty who advocate against this perfectly safe food process.)  This would allow them to continue the moratorium indefinitely.

Principles of microeconomics: My online videos

I've been "flipping" my classroom this year.  That means that I've been having my students watch lectures at home, while we've been doing more activities and homework problems during class.  This makes class time more interactive and I think I have more value to the students this way.  There are also other benefits.

First, the students can rewatch the lectures if they want.  That may not sound exciting, but when trying to learn a difficult topic, going through a video multiple times might help.

Second, since the videos are made, I can share them outside the Susquehanna University community, so others who wish to watch the lectures have the opportunity.

I'll be posting various lessons throughout the semester.  For now, here are links to a couple introductory lessons:

Supply and Demand: Part 1 (also below):

Supply and Demand: Part 2 (also below):

Friday, September 20, 2013

Idea from a comment - $5.00 minimum wage during 6-months working

Here's an excerpt of a comment made on this post about the record teenage unemployment rate.

Why not just make a six month exception from the minimum wage for everyone ... I do not mean the first six months your employed at every job you start. I think it might help with the teenage unemployment problem.

The author of the comment mentioned this provisional minimum wage should be $5/hour. I certainly think this would be better than the current situation.  It would give firms the chance to hire those who have no experience at a lower starting wage.  However, I fear that those who are only worth $5/hour to a firm would not suddenly become worth $7.25/hour after six months, but it is better to give that person six months worth of working experience, even if they lose their job after six months.

Alternative recommendations I would like prefer would be to abolish the minimum wage for teenagers, have this lower wage for the less experienced be less than $5/hour, or allow the period of time to last longer than one year.

Of course, the best outcome would be to simply abolish the minimum wage.

Thursday, September 19, 2013

Assorted Links

1. Commonwealth Foundation discusses teachers who want the right-to-work without paying union dues.

An excerpt:
Today, teachers from Philadelphia to Pittsburgh are coming together to voice their opposition to unfair teachers’ union practices. 
"They see teachers as cash cows," says Julie, a teacher in the Central Dauphin School District.

2. Wal-Mart = Hitler, at least according to one person who dislikes Wal-Mart

An excerpt:
"When you look at Hitler and those thugs, you can put Walmart right next to them," Gregory said in his speech to the 150 or so people at the event.
The crowd was gathered to protest D.C. Mayor Vincent Gray's veto of a bill that would have singled out the retail giant and forced it pay its employees $12.50 an hour.

3.  Thomas Sowell discusses "minimum wage madness", part 1.   Part 2 is here.

Wednesday, September 18, 2013

GM foods: What do surveys and experiments tell us about preferences?

What do Consumer Surveys and Experiments Reveal and Conceal about Consumer Preferences for Genetically Modified Foods?

That's the title of my newest publication, available at GM Crops and Food (link here).  I worked on this paper with Greg Colson (from U of Georgia).

Here's the abstract:
Assessing consumer perceptions and willingness to pay for genetically modified (GM) foods has been one of the most active areas of empirical research in agricultural economics. Researchers over the past 15 years have delivered well over 100 estimates of consumers' willingness to pay for GM foods using surveys and experimental methods. In this review, we explore a number of unresolved issues related to three questions that are critical when considering the sum of the individual contributions that constitute the evidence on consumer preferences for GM foods.

Tuesday, September 17, 2013

Quoted in article about poker in San Fernando Valley Business Journal

Here's a link to a screenshot of the article. 

Minimum wage sanity prevails in Washington, DC – for now

Mayor Vincent Gray vetoed a bill on Thursday that would force Wal-Mart Stores and other large retailers to pay their employees at least $12.50 an hour, calling it a “job-killer” that would not advance the goal of providing a living wage for workers in the District of Columbia.

The city council passed a bill saying large retailers would have to pay $12.50 per hour as a minimum wage.  Their mayor, thankfully for society, vetoed the bill.  If this was passed, Wal-Mart indicated they would not build as many stores.  Other stores surely wouldn't build in Washington as well. 

For those businesses that stay, they would also both try to rely more on machines (self-scanning machines, for example), and also not hire the less productive ($8-$10 per hour value ) workers and instead hire those who actually are worth $12.50 or more per hour to the firm’s profits.  This is one of the few good news stories about minimum wage that I've heard recently.

Unfortunately, the council still could override the mayor’s veto.  

Sunday, September 15, 2013

Two stories of federal government overreach

1. Seventy federal agencies have armed forces.  

Seventy!  This story also describes an armed raid in Alaska - a case that sounds like government terrorism.  There are plenty of other stories out there where these armed bureaucrats have misused their power.  If you need the police - call the police.  But the EPA and these other agencies shouldn't have an armed force.

When we need cuts to help get our budget into balance - this seems like a good spot.  By cutting these positions, we would both save money and increase our freedom.

2.  Regulations for blind and deaf patrons in movie theaters coming

Really?  Is this really what our disability laws should be used for?  To make sure those who are blind or deaf get a better experience at the movie theater?  In pure benefit-cost analysis, this fails miserably.  By how much is this going to improve the well-being of those who are blind or deaf?  It certainly won't be by as much as the increase in costs for a) the changes the theaters have to make that will ultimately be paid mostly by consumers and b) the government bureaucrats who've already collected millions in salaries to write these regulations, and will likely spend billions more enforcing them if enacted.

Friday, September 13, 2013

Links to all my opeds

I've finally put together a page that links to all my opeds. I will provide updates when I published new opeds.  (My current goal is to write about 6-8 opeds per year.)

A permanent link to the list is here.

Here's the current list:

It’s Time for the Federal Government to Legalize Internet Gambling.”  Forbes.  June 25, 2013.

If not for fracking, Mitt Romney would be president.”  The Express (Lockhaven, PA).  June 6, 2013.

Eliminating prevailing wage will make government more efficient.”  The Patriot News (Harrisburg).  April 28, 2013.

Lost jobs from liquor privatization not necessarily bad.”  The Patriot News (Harrisburg).  February 10, 2013.

The NRA’s Armed Guard Proposal Is a Bad Idea.”  US News and World Report.  January 30, 2013.

Right-to-Work Law Could Boost PA.” The Philadelphia Inquirer.  December 27, 2012. Also published in The Patriot News (Harrisburg) on December 23, 2012 under title: “Pass Right-to-Work Law in Pennsylvania.”

Benefits of School Vouchers Outweigh the Negative Aspects.”  The Patriot News (Harrisburg).  February 8, 2011.  Also published in The Daily Item on January 26, 2011 under title: “An Economist’s View of School Choice Funding.”

Exploring Benefits and Costs of Boscov’s Plan.”  The Daily Item.  January 4, 2009.

Should online poker be illegal?”  The Daily Item.  August 5, 2006.

Thursday, September 12, 2013

Radio Interview on Economic Impact Studies and the Canadian Pipeline

This is with the CBC radio station in New Brunswick.

I mainly discussed some of the issues you see with economic impact studies that are published.  We also briefly discussed the economic impact of the TransCanada pipeline.

Link here

(If the link to the CBC station doesn't work, you can also find it here.)

Tuesday, September 10, 2013

Fracking has helped more poor people than government programs, and other fracking links

1. Story title says "Marcellus Shale not Beneficial".

This is a poor title for the story.  They basically argue for a larger fee for those who extract natural gas from fracking.  I don't think they do a good job arguing that Marcellus Shale isn't beneficial.

2. Fracking helps more poor people than welfare.

An excerpt:
The Mercator study notes low natural gas prices help low-income families the most because they spend a larger share of their income on energy. Despite energy subsidies:
 " . . . lower natural gas prices have still shaved $10 billion a year from the utility bills of poor families."
By comparison, LIHEAP provided approximately $3.5 billion in home-heating subsidies to about nine million households in 2012, the Journal reports.  That is only 35 percent of the benefit from lower gas prices.
3. Information on an upcoming webinar from Penn State.

Monday, September 9, 2013

Record Teenage Unemployment

Link here

An excerpt:
In 1999, slightly more than 52 percent of teens 16 to 19 worked a summer job. By this year, that number had plunged to about 32.25 percent over June and July. It means that slightly more than 3 in 10 teens actually worked a summer job, out of a universe of roughly 16.8 million U.S. teens.
"We have never had anything this low in our lives. This  is a Great Depression for teens, and no time in history have we encountered anything like that," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. "That's why it's such an important story."

This story, however, doesn't mention the key difference between now and the (start of) the Great Depression.  The minimum wage.  The huge minimum wage increase to $7.25 per hour (from $5.25 per hour) occurred just before the recession started.  This meant a simultaneous big decrease in demand for teenage labor at the same time that cost of teenage labor would shoot upward.  

This excerpt provides evidence for the minimum wage causing the increase:

One of the more surprising findings of Sum's research is that teens whose parents were wealthy were more likely to have a job than those whose parents had less income. Some 46 percent of white male teens whose parents earned between $100,000 and $149,000 held a job this summer, compared with just 9.1 percent of black male teens whose family income was below $20,000 and 15.2 percent for Hispanic teen males with that same low family income.

This is surprising if you think "why would wealthy kids need to work?".  This isn't surprising once you think about who the minimum wage affects most.  Which kids were most likely to learn the skills to make they valuable workers when they were children?  The wealthier ones, of course.  They're still able to find jobs - or at least much more likely to find jobs.  The minimum wage has the biggest impact precisely on those who most need job training.  I agree with this line:

The natural order of career progression has been stunted.  "I think that means that a lot of workers aren't advancing through their careers," he said. "Younger workers aren't going to be progressing through their careers as they did before."
The fact that lower skilled teenagers can't find jobs is awful.  More because these job skills will help get future jobs with higher pay.  

Overall, this article is informative, but it is terrible reporting to never mention how the minimum wage is causing some of these problems.  

Friday, September 6, 2013

Bad news in new jobs report

1. Record number of Americans are now out of the labor force.

Including an additional half-million people who left the labor force this month?  Wow.

An outstanding post by John Lott.  Very sad that the new jobs that have been created are part-time jobs.

Tuesday, September 3, 2013

Great quote from Commonwealth Foundation

Link to the Burdens of Obamacare from Commonwealth Foundation

Excerpt in response to the question: "Isn't it immoral for people to profit from health care?"
"Doctors saving lives should be well paid, and thankfully can profit from their work (or else there would be a lot fewer doctors). Are farmers bad because they profit off of growing the food you eat to live?"

Assorted Links

1.  John Lott breaks down the impact of drilling on GDP and Obama's delay of the Keystone Pipeline.

2. Making law-school two years?  Discussion at the Freakonomics blog.

3. The US government is offering cash prizes for videos promoting Obamacare.

This is sick and disturbing.  In addition to the $30,000 in prizes - taxpayers are probably spending many times that amount on the labor for the people who are administering this contest.

4. Slate has a good story about the gender wage gap (via Lew Rockwell)

It concludes: 

If this midcareer gap is due to discrimination, it’s much deeper than “male boss looks at female hire and decides she is worth less, and then pats her male colleague on the back and slips him a bonus.” It’s the deeper, more systemic discrimination of inadequate family-leave policies and childcare options, of women defaulting to being the caretakers. Or of women deciding that are suited to be nurses and teachers but not doctors. And in that more complicated discussion, you have to leave room at least for the option of choice—that women just don’t want to work the same way men do. 

5. Robert Murphy has a nice post about "minimum wage shenanigans". 

One excerpt:
I can’t find myself making this specific point–is that even if you conceded that “modest” increases in the minimum wage wouldn’t lead to significant drops in employment, that that had no bearing on whether Obama’s proposed 24% increase (to $9/hour) would have an effect.