Op-Ed hits Philly Inquirer

My op-ed on right-to-work was published in the Philadelphia Inquirer ...

In Praise of Scrooge

I hadn't seen this until posted on Greg Mankiw's blog the other day ... Very fun read.

Merry Christmas!

Oped on Right to Work

I wrote an oped on the Right to Work laws that appeared in the Harrisburg Patriot News today.  Link here.

Here's the conclusion:

While I've laid out three key economic benefits of right-to-work, I think the issue goes beyond economic analysis. It is an issue of freedom.  We should recall what economist Walter Williams said about taxes and see how it applies to forced union membership. Slavery was forcing someone to work for somebody else’s benefit. Seizing somebody’s income against their will (whether by taxes or by forcing them to pay union dues) is different only in magnitude, not in kind.

Even if right-to-work were bad for the economy, I think it would be the right thing to do. With right-to-work, however, it is comforting to know that economic benefits will come from providing more freedom. I hope Pennsylvania lawmakers will do the right thing and pass right-to-work. 

What I've been reading

Most of my recent reading list has been non-economics, but instructive nonetheless.  Recently I've read:

* No Matter What, They'll Call this Book Racist." By Harry Stein.  A great book about race in the USA.  The quote that stuck with me from this book was one he had from Walter Williams.  "The welfare state has done to black Americans what slavery couldn't do, what Jim Crow couldn't do, what the harshest racism couldn't do.  And that is to destroy the black family."  

* The Dark Side of Disney.  By Leonard Kinsey.  This book is quite interesting, if you're a Disney World fan.  It goes through many interesting ways this person (and other he interviewed) have exploited loopholes in or around Disney World.  I found the sections describing an adventure somebody took to a former Disney "park" on an island fascinating.   

* The Litigators.  By John Grisholm.  I enjoy Grisholm's books, even though his leftist activism sometimes creeps it's way into the books.  This was one of his better books, in my opinion.

* Priceless.  By John C. Goodman.  This book is amazing.  As an economist, the rules and regulations of the healthcare market seemed so difficult I used to struggle trying to dig into the topic.  This book is, by far, the best writing on health care in our country.  It goes through and systematically describes all the ways that the market system has been removed from healthcare in our country, and how we've suffered the consequences.  All members of Congress should be required to read this.

* The Unofficial Guide to Disneyworld/Disneyland.  We have an upcoming trip to DW ... Nothing more to say about this, except this book is quite good.


In the queue:

* In My Time.  By Dick Cheney.  I enjoy political biographies/autobiographies, and am looking forward to this one.

* The Fellowship of the Ring and 2nd/3rd books in the series.  I had these on the list last time, but have been stalled during the semester and with other books.  I'm halfway through the first of the trilogy.

* The Racketeer.  By John Grisholm.

My queue is shorter than normal, although it'll probably be replenished on Christmas.

Entitlement Monopoly Video

LINK HERE

It's from Slate, so I assume they're trying to make fun of Republicans and Libertarians.  I still find it humorous. (Especially when the kids point and laugh when the Dad has to go to work.)

There are lots of things you could debate ...  E.g. do you equate the old-man who worked his whole life with the person who's suing because she slipped?  I don't, of course.

Even with the slight quibbles I have, this is funny and a good way to spend one minute of your life.

Two stories on gun control ...

The President, true to his administration's mantra, isn't going to let a crisis go to waste.  It appears he wants to exploit this tragedy for political gain.  I just wish he showed this type of rush in fixing the fiscal cliff issue in August or September.  (Or even now!)  

Related to this topic, here is one great article and one great blog post about guns, gun control, and gun-free zones:

Thomas Sowell writes yet another great article.   Here's a quote:
"The few counter-examples offered by gun control zealots do not stand up under scrutiny. Perhaps their strongest talking point is that Britain has stronger gun control laws than the United States and lower murder rates.

But, if you look back through history, you will find that Britain has had a lower murder rate than the United States for more than two centuries-- and, for most of that time, the British had no more stringent gun control laws than the United States. Indeed, neither country had stringent gun control for most of that time."

John R. Lott has had some good blog posts the past few days.  Here is one of them.  He makes a point I didn't know:

"And I'll give you a simple example from this year. I mean any of the ones you point to from this year or past years are going to follow that, but look at the Colorado shooting that the governor is going to be coming on to talk about. You had seven movie theaters showing the Batman movie within a 20-minute drive of the killer's apartment.

Only one of those seven movie theaters posted a ban on concealed handguns. The killer didn't go to the movie theater that was closest to his home. There was one that was only 1.3 miles away. He didn't go to the largest one. In fact, one advertises itself quite openly as having the largest auditorium in the state of Colorado.

And you'd think if you wanted to go to one that would kill a lot of people, he'd go to the largest one on premiere night for the Batman movie. Instead, the one he went to was the only one that banned concealed handguns. And that happens time after time."

More police presence in LA schools ...

Story here.  A quote:

""Somebody in a uniform is going to stop by everyday at these schools," Beck said in an interview.

The chief stressed that he and his aides were still drawing up the details of the plan, which he said will begin when students return from winter break next month. Any private or charter school that wants to be included will be, he added."

I had family in town on Friday, and didn't watch much of the coverage of the day's events.  I was horrified, naturally, but thankful I wasn't at home alone where I likely would have watched the TV coverage.  Reading the story off the Internet was terrible enough.

One problem after events like 9/11 or other major tragedies is the potential for rash decisions that aren't efficient.  One could debate several effects of 9/11, including the expanded TSA, and make a good argument that it is not wise.  (The TSA certainly costs far more per life saved than what's optimal.)

If police officers are going to schools that's less time they are devoting to other activities.  Given that schools are generally quite safe, this seems like a bad decision.

Right to work passes ...

I'm happy about it.  Video here:

Two notes:

1. The evidence is mixed on right-to-work's effect on the economy using statistical/econometric tools, but the most reliable evidence seems to show an overall positive effect.  (The AFL-CIO note in the story is just silly.)

2. The one lady said: "with a stroke of a pen, (they) take our rights away."  How silly.  Their rights?  They were forcing people to pay money they didn't want to pay to an organization they didn't want to support.

It must be tough for this lady and those who think like her.  These people were able to force citizens into doing something they didn't want to do, but then the government had to come along with a law that gave them their freedom.

What offense get's you fired if you're a Michigan teacher?

If you are a Michigan teacher, not paying Union dues can get you fired (as of now).  Link here.

Apparently you won't get fired if you lie about being ill and call in sick.  Link here.

Horrendously biased AP piece on right-to-work

This is one of the worst stories I've seen, at least as far as political bias:

It opens:

For generations, Michigan was the ultimate labor stronghold - a state built by factory workers for whom a high school diploma and a union card were the ticket to a middle-class life.

Yet it took only hours for Republicans to tear down a key part of that tradition, the requirement that all employees in a union workplace pay dues.

Read more here: http://www.kansascity.com/2012/12/07/3954789/michigan-republicans-end-part.html#storylink=cpy

This reminded me of the (excellent) book titled "The Armchair Economist" by Steven Landsburg.  That book has a section titled "How to Read the News".  It goes through examples of biased stories and how the exact same facts could be used to tell a different story.  For example, let's try rewriting the above story with the opposite slant:

"For generations, Michigan forced employees in a union workforce to pay union dues - whether they wanted to be part of the union or not.  A sizable portion of these dues, essentially a tax, funded political campaigns and large salaries for union bosses.

These restrictions were removed by Republicans in just hours, and if signed by the governor, Michigan workers will be taking more money home in their upcoming paychecks."

I like this version better, but I am libertarian leaning.  Of course I'm not attempting to write an objective story.  This version clearly has my opinion worked into the story, but I don't think it's any more biased than the quotes above.

The problem, of course, is that writers at the AP should be objective.

Who is more closed-minded?

Paper here.

Discussed at Marginal Revolution and Freakonomics.

The study finds that liberals and conservatives don't seem to score different when tested for "closed-mindedness".  What I'd like to know is if this could be tested by profession.  Personally, I feel lucky that I'm at a place like Susquehanna University where most people are accepting of political differences.  That being said, it was explained to me once that the opposition to the president's policies on spending by the tea party was largely just fueled by racism.  I have also heard other left-leaning professors rant about close-minded (and racist) people who vote Republicans.

My anecdotal evidence indicates (as a libertarian leaning individual in academia) says is that within academia, those on the left are more likely to be closed-minded.  It makes sense, because they don't get exposed to intelligent thinking by their intellectual opponents in personal interactions as often.  If you're a leftist on a campus, your views simply won't get challenged too often.

Alternatively, perhaps I am just crafting a world view that makes me sound better.  That couldn't possibly be the case, could it?  :)

Edward Conard on Buffett

Here is another story on Warren Buffett.  This one is by Edward Conard.

There are so many good points in this short article.  One paragraph worth highlighting:

"Comparing the growth of the U.S. with Europe’s since the early 1990s removes the effect of the Internet. Both economies had access to the same technology and similarly educated workforces to capitalize on the Web’s opportunities. Since then, the U.S. economy has grown 63 percent (in the period through the end of 2010); France and Germany’s together grew less than half as fast. U.S. productivity growth increased from 1.2 percent a year to 2 percent while France and Germany’s declined to less than 1.5 percent a year in the periods 1972-1995 versus 1995-2004. Without U.S. innovation, Europe’s growth would have been lower."

I teach Political Economic Thought next semester, and we will be using Mr. Conard's most recent book, Unintended Consequences.  (We also use books by Friedman, Krugman, Sowell, Stiglitz, and others.)

RWJF discusses state funding of anti-tobacco programs

The Robert Wood Johnson Foundation seems dismayed that only about 2% of the tobacco settlement money is going to prevent tobacco use.  (Link here.)

Are states behaving sub-optimally?  I have my doubts.  Tobacco rates have dropped in recent years, and anti-tobacco campaigns seem to have played a part.  But it's unrealistic to think that a campaign is going to instantaneously decrease rates to zero.  The question an economist would ask is if spending extra money on tobacco prevention would yield additional results.  (In the form of fewer smokers.)  If they would, is the cost per person that doesn't smoke based on these efforts worth it?

I don't know the answers to this, but I suspect the cost of getting smokers to quit is not cheap.  

Disclaimer: I have received grant funding from the RWJF in the past to study tobacco related issues.

Are these the same folks who think local foods taste better?

See related story at Freakonomics.




Edit: I have nothing against those who prefer to spend their own money on local foods.  I would question, however, whether they could universally distinguish the difference between local and non-local foods.

More Fiscal Cliff ... Why Doesn't Obama Get Blame ...

This is something I discussed during a radio appearance I made Tuesday morning (link here - but the discussion is well after the 30 minute mark).  Why doesn't Obama get blamed for not addressing the fiscal cliff issue sooner?  The American people hired Obama to be the president for four years.  He, however, seemed to completely neglect his presidential duty in this matter.  He should have been working on this issue in August, September, and October.  Instead, Obama choose to campaign.

The House of Representatives and Senate share a bit of blame too, but this wasn't going anywhere without Obama.  It is really quite sad that nobody seems to think there was anything wrong with this.

The Fiscal Cliff

Americans will blame Republicans if deal isn't reached.  This doesn't seem like too big of a threat to them, however, as the next election is two years away, and any ill will will be long gone by the time the next election comes around.

I hope Republicans ignore this and do the right thing.  Republicans need to force spending cuts now, as otherwise it will be almost impossible to do later.  I think this should also involve some modest tax increases, but the better way to raise tax revenue, in my opinion, would be to cut out loopholes and deductions and leave tax rates the same. (Or only increase them slightly.)

Pat Toomey has a great op ed on this issue.  Link here.

My favorite part is the quote of Obama and Toomey's agreement:

"... The vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements, would prefer, frankly, not to have to do anything on some of these debt and deficit problems. . . . And what I've tried to explain to them is, number one, if you look at the numbers, then Medicare, in particular, will run out of money, and we will not be able to sustain that program, no matter how much taxes go up. I mean, it's not an option for us to just sit by and do nothing."

- President Obama, July 11, 2011

I agree with President Obama. No matter how much we raise taxes, we cannot avoid a fiscal disaster unless we address the true drivers of our out-of-control deficits - namely, our entitlement programs. 

On the radio - Tuesday at 9:00 AM

Just as a heads up ... I'll be on the radio at 9:00 Tuesday, December 4th.  I'll be a guest of the "On the Mark" program.

You can listen 1070 AM if you're in the area or over the internet at this link.

Discussion of Sandel's book and great quotes by McCloskey

Several links:

1. Discussion of Michael Sandel's new book.  I've read most of his book "Justice", but not this one.  Given the reviews and time constraints, I highly doubt I'll add it to my reading queue.  You absolutely should read Deirdre McCloskey's review.  (Really, you should read anything McCloskey writes.)

Here are two of my favorite quotes from McCloskey's review:

"Because they do, most of them accept for example that going down and joining the union made workers better off, by giving them better bargaining power against the bosses, even though the historical evidence is crushing that unionization did not make workers better off (rising productivity did)."

"The poor have benefited the most from capitalism. The sheer, first-act, unanalyzed equality that Sandel advocates would have killed the modern world and kept us in the appalling poverty of the human condition down to 1800. In fact in some countries it did, such as India after 1947, under Gandhi-plus-London-School-of-Economics egalitarianism, the "License Raj" and "the Hindu rate of growth," as the Indians themselves bitterly described their communitarian economy. When I talk to friends who think like Sandel I worry that their dispositions will kill, quite unintentionally, the only chance for the world's poor to achieve the scope for a full human life."

Recent published research ....

Link here.  This was a fun project ...

Abstract:


Hypotheses explaining outcomes from internet poker were tested by using structural equations modeling: Personal characteristics and traits were proposed to influence motivation, leading to gaming behavior and then to outcomes. One hundred ninety-four participants from an internet poker forum completed online assessment. Three separate outcomes were supported: social-emotional gains, monetary winnings/losses, and negative experiences. One third of the participants reported some negative outcomes and 12% said these were significant; two thirds indicated no negative outcomes. Problems were most linked to the trait of Neuroticism, younger age, and more hours played, but unrelated to amounts won or lost. Gaming for social-emotional benefits mediated fewer negative outcomes. Financial gain motivation was a key mediator for gaming behavior. Findings were consistent with research showing negative emotionality and youth to be associated with poor gambling outcomes. The model suggests concrete actions that can be taken to minimize problem gaming while maximizing healthier involvement with online poker.

Warren Buffett Links

Warren Buffett is in the news again.  I used to hold him in high regard, but not anymore.  He's a master at avoiding taxes while advocating for higher taxes on the wealthy.  Further, he doesn't seem to advocate closing the loopholes he exploits.

Here is Buffett discussing his thoughts on new taxes.

Here is the Weekly Standard exposing his hypocrisy.

Greg Mankiw discusses.

Good op-ed on Pennsylvania's Liquor Control Board ...

By Jay Ostrich of the Commonwealth Foundation.

Article is here.  This is an interesting read, but the biggest beneficiary of disbanding the Pennsylvania Liquor Control Board would be consumers, who would pay less for alcohol if there is competition.  This extra money these consumers save would mean there is additional spending in other areas as well, benefiting even those who don't drink any alcohol.

Laws Restricting Consenting Adults ...

The laws restricting consenting adults from making transactions with each other, otherwise known as price gouging laws, have been in the news recently (and on this blog) with the gas prices in New Jersey.  Some recent stories.

Link to summary of state laws.

Gas lines in New Jersey down as prices are up?  This should not be shocking information for anybody who takes introductory economics courses.  Link here.

A debate on price gouging laws.  The person arguing for them gets an intellectual beat-down.

Happy Thanksgiving!

Hope you have a great day!  Our family is in California, enjoying the holiday.

Some links:

Earlier this week, we visited a place that has mastered the art of capitalism:  Link here.

Economic news about Black Friday.

Some despicable union activity on Thanksgiving at LAX.

Hopefully this isn't a symbol of things to come.

Update on Economic Impact Review

My new website, Economic Impact Review, is going well.  It now has many reviews of Marcellus Shale studies along with a few reviews of National Parks/State Parks posted.  We have started reviewing several more studies that should be posted in the next few weeks.

In addition to posting reviews of economic impact studies on Marcellus Shale, National Parks, and State Parks, we have posted other economic impact studies that we haven’t (yet) reviewed on these topics.  Hopefully, however, by having them posted we provide easy access to these EI studies for researchers, journalists, etc. 

Economic Impact of Colleges/Universities

We recently updated the site with a page that has links to economic impact studies on colleges and universities.  (Link here.)  When I have conducted economic impact studies on universities, I found it tedious to find publicly available studies, so hopefully this page is useful for those conducting an economic impact study on a college and university.  We are starting with colleges and universities in Pennsylvania and New Jersey, with other states coming soon.  

There are no immediate plans to review economic impact studies conducted for colleges/universities.

A happy election result from California

I was pleased to see California voters defeated a measure to require labeling of GM foods.  I had more of a personal interest in this vote, as much of my research in my first decade of scholarly work (2001-2011) was spent constructing experiments on GM products, implementing them, analyzing the results, and writing them up the results for journals.  (I have many publications on preferences for GM foods, how information affects preferences, and more ... links to my CV containing my list of publications is here.)

I could write about what happened and why GMOs and why I wanted this bill to be defeated, but it's better to simply provide links.  First, a few stories from Jayson Lusk's blog.

A few of Lusk's stories before the vote:
Link 1
Link 2
Link 3

And a story reporting on vote is here.

Here's MRuniveristy.com's lesson on GMOs:

Discussion on future of Republican party on poker site

I still read a forum at a poker site from time-to-time, internettexasholdem.com.  It's a small community by forum standards, but there are many really smart people there from different backgrounds.  There is an interesting post on the future of the Republican party there, and I responded with some thoughts, which I'll share here.  For the full discussion, see this link.

On the question of: "Is the Republican Party Dead"

* Given Obama didn't have much to run on this election, it's pretty reasonable to ask what chances Republicans will have in the future. What happens if the unemployment rate is 5.9% or lower in 2016? (Which I think is completely reasonable.) Unless Republicans can broaden their appeal with Hispanics, it will be tough to win presidential elections in the future. 

* That being said, if Hurricane Sandy doesn't hit - who knows about this one. After the hurricane, Obama could be seen as a president. He didn't have to answer questions about Libya or the economy for the final 10 days of the election. The average of polls shifted by two points towards Obama in the last 10 days. 

On the post-election diagnosis:
* Whenever one side wins by 1 or 2 points, pundits talk about the losing side having total failures in their strategy while the winning side was brilliant. We have all played enough poker to know that sometimes you just get cold-decked, right? This happens both ways - I remember hearing how the Democratic party was dead after the election in 2004. 

On a comment that Republicans have a problem in having to veer to the right to win the nomination:
* I think Nside's point on Republicans having to veer to the right is also (potentially more?) true for Democrats having to veer to the left. Obama is very liberal. So was John Kerry. Moderate Democrats seem to be a rare breed anymore, and they certainly don't get presidential nominations. Sometimes they even get beat in senatorial primaries for being moderates (like the Democrat VP nominee in 2000).

A Quote for Election Day

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science".  But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

By Murray N. Rothbard.  Taken from Peter Boettke's "Living Economics".  

This really puts things into perspective, doesn't it?

Discussing the lines for gasoline ...

After reading the John Stossel article yesterday, and hearing of the long gas lines in a radio news update this morning, I decided to call into our local radio talk show ...

Here I talk with the hosts of "On The Mark" at the beginning of the show about how laws against price gouging hurt the public.  I start at about minute four and am on for about ten minutes.  I have no idea what happened (who called in) after I was on ... 

Note - I just saw that prices for gas have gone up in NY.  The article does mention that price gouging is illegal, however.  

One way to reduce the pain of the hurricane ...

Allow price fluctuations!  Great story here by Stossel.

The key point:

"Today, some car owners wait in line just to top off their tanks. If gas stations could raise prices, many of those drivers would wait, and drive less.  Drivers who really need gas would be able to get it.    At the same time, entrepreneurs would rush gasoline to gas stations that have the highest prices.   The lines would quickly vanish, and prices would come back down."

Who could have predicted ...

... That car prices would rise?  The photo is from the USA today ..

Well, this is actually a good question for discussing economics.   When Cash for Clunkers destroyed perfectly good used cars, the supply of used cars decreased, causing an increase in prices for used cars.  

Then, when we have higher prices for used cars - which are a substitute for new cars - this would cause demand for new cars to go up (which causes higher prices for new cars).  This may not be the only cause of higher prices for new cars  - perhaps Japan's lack of production with the tsunami decreased supply as well - but it should be one of them.

I should use this for an exam question ... Will have to work hard to disguise my disgust for the law that helped cause this, however.

Great Interviews Putting this Recession in Perspective

Russ Roberts interviews John Taylor, who is an eminent economist at Stanford.  These interviews are absolutely outstanding for examining this recession (and recovery) and comparing to past recessions/recoveries.  

The total time is about 20 minutes.  

Here is part 1:

Here is part 2:

Discrimination in Higher Education ... Lawsuit Edition

Link here

"Wagner, an Iowa law school alum who had worked for the Family Research Council and the National Right to Life Committee, worked part-time at the law school's writing center. Twice, she applied for full-time positions. Twice, despite positive reviews and being the most qualified applicant, she was rejected. So she sued."

I will be curious to see what happens.

Another story on Economic Impact Review

Another media outlet has reported on on Economic Impact Review.

I did a radio interview with them, and I think my quotes look pretty bad in print, but they probably sounded OK for the radio interview.  Unfortunately, all I have here is the link to the article.

P.S. Economic Impact Review now has a page up with links to many economic impact studies done on national parks, state parks, and other recreation areas.  Link is here.  Within the next week we should have our first few reviews of these studies posted.

Economic Impact Review in the News

The Youngstown Vindicator writes about my website, Economic Impact Review.

Here's part of the story - for more, the link is here:

“It only takes a small assumption to create a result that is much higher or lower,” said Matthew Rousu, associate professor of economics at Susquehanna University in Selinsgrove, Pa., and creator of a website designed to evaluate such studies.

Confusion and bias among those economic reports led to the site’s creation. The Economic Impact Review will post and review economic impact studies.

Though the initial emphasis is on Marcellus Shale studies, the plan is to expand the reviews to other economic-impact reports.

The site is not funded by the oil and gas industry or by any environmental group, Rousu said.

What I've read and my reading queue

I've been busy this summer/early fall, but still have been reading some new books.  Much of it has been for books that will go into the new political economic thought class (see post here), but not all.  Some other books that I've read in the past few months:


Economics/Social Science related books:

John Stossel's "No We Can't":  This book does a great job of explaining the libertarian philosophy and the problems with big government.  In fact, I think this book helps illustrate why I usually vote republican.  It's not that I agree with republicans that much more than democrats.  However the regulations, red tape, and lack of rewards for success that too many democrat elected officials tend to support makes me absolutely sick.

Charles Murray's "Falling Apart: The State of White America": Wow - what a compelling book.  I'm only 100 pages in, but it's already worth the money (and time) I've spent.  Does a great job explaining why our society may be dividing.  The book focuses only on whites to make sure any confounding factors of race aren't present in his analysis (and he's had his share of race-related controversy in the past).  Very good book.  I've always liked his book - "What it Means to be a Libertarian".  That's worth a read if you get the chance.



Non-Economics books:

The Hunger Games trilogy:  Outstanding books.  Both entertaining and also useful to read to get a sense of government dictators gone wild.  The parallels to communist governments are jump from the pages.

The Hobbit: My oldest son read this and has started on the Lord of the Rings Trilogy.  I am following behind, and we plan on watching the movies together soon.  

The Lord of the Rings: Fellowship of the Ring:.  I'm only part way into it, but I like it.  I think this J.R.R. Tolkien author might be big someday.


In the Queue:

The Food Police: By Jayson Lusk (started this, but not far enough into it to comment yet.  I'll provide a full review on this site in the near future.)

Priceless: Curing the Health Care Crisis.  By John C. Goodman

An Economist Gets Lunch.  By Tyler Cowen  (Again, I've started this and gotten through about 25% or so of it.  Good but other books have jumped ahead in the queue.)

The Litigators.  By John Grisham

No Matter What, They'll Call this Book Racist.  By Harry Stein.

The Casual Vacancy.  By JK Rowlings.

The remaining Lord of the Rings books.  By JRR Tolkien.

Great article on NYC soda ban by Jayson Lusk

A collaborator of mine, Jayson Lusk, has a great article in the Huffington Post on the NYC soda ban.  Link here.

He writes:

"Want the freedom to marry your gay lover? New York City will happily oblige, even granting your partner pension rights if you work for the city. A down-on-her-luck teenager wants an abortion without parental consent? No problem. It's legal in New York. And, guess which city's officials are working to give its citizen the freedom to legally possess marijuana?

Yet, there is one act too dangerous, with consequences too heinous, to allow citizens their own choice. Buying a large soda. Oh, the horror!"

He also recently started blogging.  And he has a book coming out soon called "Food Police".  (He stays busy.) The book is outstanding, and I'll post a full review on this blog soon.

News story on economic impact review site

A few news stories have come up on my new website, Economic Impact Review.

Here's a link to the SU story

Susquehanna University Associate Professor of Economics Matthew Rousu has developed a website to reduce confusion and bias among economic impact studies of the state’s Marcellus Shale reserves.

“Many economic impact studies are commissioned by groups that want a certain outcome,” said Rousu. “There often are incentives for ‘mistakes’ to be made, as long as those mistakes help the outcome. An economist paid for by a firm in favor of Marcellus Shale drilling, for example, may use different methods or different assumptions and arrive at different estimates than an economist paid by a group that opposes drilling.”

Rousu created EconomicImpactReview.com, which will publish and review economic impact studies and provide best practices for conducting such reviews. While the initial emphasis is on Marcellus Shale studies, the plan is to expand the reviews to other economic impact reports, as well.

“A properly conducted economic impact analysis can be valuable,” he said. “But unlike academic studies, very few economic impact studies are reviewed by other experts in the field.

“These studies can be done ethically or less ethically, but a high enough percentage of them are done very poorly,” he said. “Because of this, anytime I first hear about a new economic impact study, I don’t initially trust it. And that’s too bad, because sometimes they can be important.”

Economic impact reports vary widely in quality, Rousu said. One of the website’s goals is to bring credibility to the field by providing independent reviews and promoting best practices.

“Currently, when economic impact studies are published, many media outlets just run with the estimates,” he said. “This makes sense, since most reporters are not economists. But this means that there’s no incentive for an agency to be honest in its methodology when conducting these analyses, as there are rarely groups or individuals that counter any misleading statistics. We aim to correct that.”

4.5 million jobs created?

The Democrats are trying to say they've created 4.5 million jobs?  Really?  Even CNN knows better - see their fact check.

Also, for when the president or his fans decide to tell you how well the country will do under their policies, recall this chart.  For those who don't remember, this chart is from the president.  It was released when his economic team lobbied for the stimulus.  The red dots show what actually happened.  The green dot is relevant too ...

Radio interview on WKOK

I was interviewed on Tuesday.  There was a lot of discussion of the economy, my new website (economicimpactreview.com), and other topics.

Link here - I come on around 29 minutes and am on for the rest of the hour.

On radio Tuesday morning ...

FYI – I’ll be on the radio Tuesday morning. 

I'll be on from about 9:00 AM - 10:00 AM Eastern time.  You can listen live here:  http://wkok.info/listen-live/

My new project - reviewing economic impact studies

I started a new website - Economic Impact Review.  I'll write more on my motivation for starting this site later, but much can be found in the site.

One note - with so many reviews being put out daily, we're starting with a focus on Marcellus shale.  Reviews of other economic impact studies (next up - parks and national parks).

Stay tuned for more!

Is the study of economics only for the right?

Some on the left apparently think so, according to this article in The Chronicle of Higher Education.

Some of the claims here, though, I find completely ridiculous. I've used some of the leading textbooks by Mankiw (more on the right) and Baumol and Blinder (more on the left).  Both though, teach almost exactly the same material.

In principles of microeconomics and macroeconomics courses, we cover many controversial topics, but what we do in our courses is positive analysis - the analysis of "what is", "what happens", etc.  We learn that rent control leads to less available housing, that firms that pollute will produce too much of a product unless the government intervenes, and markets cause any "wage gap" for men and women who are doing equal work to disappear if firms maximize profits.  Notice how none of these issues above involve the word "should".

From learning what happens, that's when a student (and this professor) can implement their value system and do normative analysis - examining what "should" or "ought to" occur.  I think the fact that we find that the unemployment rate rises among affected groups with an increase in the minimum wage and that firms are also hurt (and a decrease in total surplus) means that we should decrease the minimum wage.  Others in the class, however, could have a different normative view.  These views are are important, but not included in the students' tests.

These views aren't taught in a principles of economics - at least not by anybody doing a credible job.  While I encourage my students to think about how they would use what we find in our positive analysis to guide their normative beliefs, that normative issues aren't tested on the exam. I feel reassured that even though I'm more on the right on economic issues, I've recruited many students to major in economics who are more left-wing.  Economics is not for just one political party - it's for anybody who wants to understand how the economy works.

Reading List for Political Economic Thought

I get the honor of teaching "Political Economic Thought" again this spring.  I taught it also in spring 2011 (discussion  here).  It was an amazingly fun class to teach, as I got to work with some of our best students, to understand and dissect political and economic points of view from both the left and the right.  Several of the books are holdovers from the last time, but there are five new additions.

As of now, here's the tentative reading list:

Friedman, Milton.  “Capitalism and Freedom, Fortieth Anniversary Version.”  The University of Chicago Press.  2002.

Marx, Karl and Friedrich Engles.  “The Communist Manifesto.”  Signet Classic.  1998.

Sowell, Thomas.  “The Quest for Cosmic Justice.”  Simon & Schuster.  1999.

Sowell, Thomas.  “The Housing Boom and Bust.”  Simon & Schuster.  2009. 

* Stiglitz, Joseph E.  “The Price of Inequality.”  W.W. Norton.  2012

Powell, Jim.  “FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression.”  Three Rivers Press.  2003. 

* Krugman, Paul. “End this Depression Now.”  W.W. Norton & Company Inc.  2012. 

* Londsburg, Steven.  “The Armchair Economist.”  Free Press.  2012.

                                         

* Cowen, Tyler.  “The Great Stagnation.”.  2011.

Thaler, Richard H. and Cass R. Sunstein. “Nudge: Improving Decisions About Health, Wealth, and Happiness. Revised and Expanded Edition.”  Penguin Books.  2009.

* Conard, Edward.  “Unintended Consequences: Why Everything you’ve been told about the Economy is Wrong.”  Penguin Books Ltd.  2012

The books with an asterisk (*) next to them are new additions. I cut out 3 books, and am reducing the coverage in Sowell's "The Housing Boom and Bust" to about 1/3 of the book, and Thaler and Sunstein's book to about 1/2 of the book.  

The new books are outstanding, in my opinion.  I definitely think Krugman's is better than the one we had in last time - and he's not nearly as vile or mean-spirited as you see in his blog or NY Times columns.  Cowen's short book is fascinating and has been a big source of discussion over the past 18 months in the econ-blogosphere.  Londsburg's book shows many great ways to think about problems in an unconventional way - and points out many errors columnists made but could have avoided using economic reasoning.

Conard's, however is the addition I'm most excited about.  I actually learned something I was teaching wrong in my principles classes.  He has a discussion of median incomes across demographic groups that is worth far more than the price for the whole book.

As with last time - we have several writers from the left and right, and a couple that are more politically centered.  It should be a great course.

Radio Appearance

I was on the radio yesterday on the "On the Mark" program yesterday.  Link is here.  I come on at about the 28 minute mark.

Note - the link is good for one week, but I'll try to download the episode so it's more permanent.

Recent news ...

Work and life have both been very busy this past month - some quick updates

* I was recently honored with the John C. Lectureship.  (Link)

* I attended two conferences.  One on teaching was really exciting, and I'm going to really work on enhancing my skills as a teacher.  I learned a lot and am excited to apply this in the classroom.

* I am working my way through a big stack of books.  I'm teaching political economic thought again in the spring, and am looking at updating the reading list.  In the next few days I'll post on the recent books I've read, what I'm reading, and what's in the queue.

* I have lots of exciting projects right now.  Similar to how coroners will say business is good during the plague, the things going on in the world today keeps economists busy.

Big government at work

Link here.

From the article:

The park's popular ice-cream stand was unexpectedly shut down by state officials over the weekend, after the stand's operator made building improvements at the site without getting permission first.

.......


.......


"I like ice cream as much as anybody, so it pains us to even temporarily close what is an iconic property, but we have to make sure people eating ice cream there are safe," said Lambert.

Make them safe?  Really?

Academia opposing free speech ...

The Chronicle of Higher Education fired an editorial writer for daring to question the educational value of black studies.  Original op-ed here.  Story about it here.

We could and should argue whether this field has any value.  Some people question the value of the field of economics.  That is their right.  And, as an economist, I should be able to defend it.

When there is a debate, you can often tell who is losing.  Look for the side that will want to punish the other person for speaking or start labeling their counterpart (racist, etc.).  They usually will resort to that when the merits of their argument are weak.  It's sad, however, when academics are the ones who try to oppose free speech.

New WSJ op-ed by the original author.

Local school issues

I had a great time in Europe, but it's wonderful to be back home.  So ... onto local news.

We live in (and our children attend) the Selinsgrove school district.  They've had budget problems, and are laying off a number of teachers (story here).

I don't think anybody has really taken the school district to task for their past decisions.  Everybody now recognizes that the school district has less money and that tough choices have to be made.  However, why do we have less money?  Part is the economy, of course, but part is from the decisions made by school board members in the past several years.

When my oldest started school, he was at a building called "Jackson-Penn elementary" but they were building a new school.  Why a new school?  Jackson-Penn seemed perfectly functional.  However, a new school was built.  It is nice, but it cost a lot of money.  The payments that are being made to pay off that school could have kept several teachers employed.

These are questions the press should be finding/reporting:

1. What was the total cost of the new buildings/construction?
2. What are the annual debt payments on these buildings?
3. How many teachers could have remained employed for that money?

Is this from the onion?

Since I'm still in the UK for two more days, here's another UK based post ...

The BBC posts a story from a Cardinal commenting on a tax plan.

Link here.

Did this person have advanced economics training?  No, he just thinks his seminary training gives him the intelligence to discuss economic policy.  One quote from him on those affected:  "People who are considering giving up their retirement homes".  Really?  Not having a 2nd home is the burden society bears?


Unfortunately, this person's statements echo what many think.  It's sad, really. Many people today think they're poor or struggling, as they talk on their smart phones with $100/month plans, watch their cable TV, surf with high-speed Internet, and drive a newer car.  Today's median consumer is much better off than the median consumer of 30 years ago - they don't feel that way, however, because of the "keeping up with the Jones" effect.  

The financial transactions tax will move business away from London.  As an American, I should actually hope it takes place, as it probably means thousands of jobs for the US.  I don't like seeing dumb policies implemented, however.

In news we already knew ...

Robert Reich is a complete and total bozo.  Link here

On the one-year anniversary (April 15th, 2011 is "black Friday" in the poker world) of the day my freedom was lessened because of the actions of simpletons with similar thoughts, it's worth commenting on this.

Reich says: "In whatever form it comes, gambling is a scam."

This statement is so simplistic and simple-minded I am surprised even he would say it.  Reich, former democrat cabinet official, has been a clown for years, but this is a new low.  I know many, many people who enjoy wagering a few dollars, either with friends on a weekend, over the Internet, or in casinos.  I also know people who are on the industry side of things and every one of them is honest and hardworking.  In fact, if one could measure a "moral compass" of my friends who make their living with gambling or in the gambling industry and measure it against almost any group - these professional gamblers would score higher.

"Within the year, high-stakes poker will be available on every work desk and mobile phone in the nation."

This is personal to me, as I am angry that he wants to prevent me from playing Internet poker.  That was my main hobby.  I don't know what his hobby is, whether it's gardening, hunting, or just making a jackass of himself in these articles, but I'm sure he wouldn't appreciate if that hobby was taken from him.

Further, anybody who's an economist should know about the problems of prohibitions and the law of unintended consequences when you mess with the market.  It gets ugly.

Because of people like Reich, when the star spangled banner is played, I can't sing the "land of the free" part.  Why?  It's because of the Reich's in the world, who think they should make my choices for me and have taken away my freedom.  It's a sad day when this type of thought seems standard in our country.

/* Rant over

Good news in Wisconsin

Wisconsin makes it tougher for wage discrimination lawsuits to be filed.  Link here.

Simple thinkers may claim that this is will cause more wage discrimination.  This is highly unlikely.  Anybody who's taken principles of microeconomics and/or lives in the real world knows that there isn't really any gender wage gap or wage gap between races.  At least not in the USA, where markets are relatively competitive.  Theoretically, it's not consistent with the idea that firms maximize profits.  Looking at the evidence, it's simply not happening.

Let's get a quote from this article:

Women earn 77 cents for every dollar that men make. In Wisconsin, it's 75 cents, according to the Wisconsin Alliance for Women’s Health (WAWH), which also estimates that families in the state "lose more than $4,000 per year due to unequal pay."

If you agree with WAWH and think ... "of course women (or insert any group here) are paid less for the same work" then I have a challenge for you.  Go become a millionaire.  It should be easy.  If (insert any group here) are making less - hire only that group.  Your labor costs will be so low that if you can do the other tasks in a remotely similar fashion to other firms, you'll be rich.

Don't bother trying this, however, as these gaps really don't exist as advertised.  There are thousands of firms who would exploit a gender/race/etc. gap if one existed.  The word "exploit" here sounds bad, but that exploitation would increase demand for the supposedly underpaid group.  For example, if women really were paid 80 cents on the dollar for the same work, a profit maximizing firm would hire only women.  That would increase the wages for women, however, while decreasing the wages for men.  Firms that want to maximize profits would exploit this gap until wages were equal.  Why can't firms do this now?  Because there's no wage gap to exploit and people are, in general, paid equally for equal work.

What Wisconsin has done is make it tougher for frivolousness lawsuits to be filed.  This is outstanding!  That will lower costs to firms, these costs will likely be passed along to workers in the form of higher wages.

Way to go Wisconsin.  Politically, maybe this is a bad move as democrats will try to confuse the issue for uneducated voters.  In terms of helping society, however, this is a great step!

Economic impact of gas prices

Link here

It's tough to understate the impact high gas prices can have.  With higher prices, consumers have less disposable income and feel poorer, but that lowered disposable income also ripples through the rest of the economy, as less will be spent in other sectors (dining, movies, etc.)

If gas prices spike into the $4.50-$5.00 range, it's really bad news for the economy - and bad news for Obama, too, heading into the fall elections.  Especially since he's seemingly done nothing to help lower gas prices.  Prediction markets were giving him over a 60% chance at reelection (62% at the highest point a couple weeks ago) at one point, but that's now down to 59%.

Stories worth reading

I'm still in London for another month and a half.  I have been keeping up with readings, even though I'm not posting often.  Here's a few recent articles that are worth reading:


More young adults living with parents.  The article doesn't mention one likely reason - the increase of the minimum wages several years ago.  When the minimum wages were increased, it made it more difficult for teenagers to get entry level jobs.  It's tough to understate the value of a first job - any job - on a young person's skill set.  Learning to work well, to deal with a boss, to keep a schedule, to learn the value of money, etc. are skills that are learned in almost any boss.  Most other jobs teach some other skills.  For example, in my first job at a fast-food restaurant I learned a lot on how to deal with both customers and co-workers - skills that have served me well since.

The unintended consequences from a well-meaning but ill-advised policy move can be nasty and long-lasting.

Sometimes I have a thought - but then Thomas Sowell says it so much better. 


A good story on the budget. 

good post on how American football might collapse

Article here

Concussion lawsuits, anyone?

Discrimination in Higher Education

It's sickening, and it's more widespread than just the institutions that are named here.  Another article on racial policies here.

Quoted in the Daily Item

I'm quoted discussing the payroll tax freeze.

Link here 

Some posts to read and my reading list ...

Here's links I think are worth reading:

An open letter to University students

Debate over SOPA - people talking reasonably - note: I completely agree with Mankiw.

Krugman inconsistencies.  Not surprising.

As far as books: 

I've recently read:
Notes from a Small Island by Bill Bryson
The Confession by John Grisham
The Lincoln Lawyer by Connelly (I liked the book but haven't seen the movie - is it worth seeing?)
The Defended (- biography of Minute Bol)
ESPN The Uncensored History (dated but good)

In progress or in the queue:
Keynes vs. Hayek: The Clash that Defined Modern Economics.  I'm reading this now.
11/22/63 by Stephen King: Also reading this now.
Race Against the Machine (in queue)
Thinking Fast and Slow (in queue)
Posner (The Crisis of Capitalist Democracy)

I've got time on the tube to read, so hopefully I can get these read in the next month or so.

Am I the only one who thinks this is a good thing?

Congress passes fewest bills on record

The fewer times Congress is imposing new laws, the better, in my opinion.  Name the last time you said: "Wow, I'm so grateful for this new law - it's superb!"  I can't come up with it either.

When gambling is OK ...

Story here

I find it odd that the same politicians who will oppose making it easier for consenting adults to place a wager on poker over the internet are excited about the lottery.  And this is because some proceeds go to subsidize older citizens.

Why can't we legally play poker on the internet, then?

Sigh.

Not many posts in next couple of months ...

I am leading a study abroad group in London for the next four months. Because of that, I won't have time to post that often. We are posting about our family's adventures at quesoviejo.blogspot.com.