Milton Friedman's 101st birthday

A nice write-up by PLF

Excerpt:

Like F. A. Hayek before him, Friedman had seen collectivist governments rising and falling, and he worried that the United States would follow in their footsteps rather than learning from the past. Unfortunately, history seems to have proved him right.

And the obligatory video.  This is a long but a great video from the "Free to Choose" series.

Liquor privatization in Washington

The state of Washington has benefited from liquor privatization.  (H/T The Commonwealth Foundation)

Excerpt:

Liquor consumption is up, as opponents predicted, but not by a dramatic amount. In the 12 months that ended May 31, state-taxed sales of liquor, including bars and restaurants, were up by less than 1.5 percent. 

People complained that prices in private stores were higher, and generally they were. The average retail price per liter sold, including tax, was $23.87 in May 2013, up from $21.07 the year before. Bars and restaurants paid an average $18.77 in May 2013, up from $18.09 a year earlier. Tax collections were up 9.7 percent; the privatization initiative was written to insure the state came out ahead, and it did

A couple notes:

1. Prices should fall, as long as the tax isn't too large.  Washington state decided to put in a very large tax, which helped prompt price increases.  Also, the number of permits that are allowed to firms to sell liquor will influence the price.

2.  The price paid doesn't contain the implicit tax that consumers were paying before for their lack of convenience.  For me to go to a liquor/beer store instead of buying alcohol at a grocery store, it might take an extra 10 minutes.  If I value my time at $30/hour, that is a $5 tax.

Pennsylvania would benefit from liquor privatization ... I hope our politicians do the right thing and end the government's control of liquor.

Bad incentives ... disability pay edition

Many who receive government disability checks admit they could work

Excerpt:

Recipients of federal disability checks often admit that they are capable of working but cannot or will not find a job, that those closest to them tell them they should be working, and that working to get off the disability rolls is not among their goals. 

More baffling, most have never received significant medical treatment and not seen a doctor about their condition in the last year, even though medical problems are the official reason they don't work. Those who acknowledge they're on disability because they can't find a job say they make little effort to find one, according to a Washington Examiner analysis of federal survey results.

It's sad, but predictable. If you offer large incentives for people not to work - you'll expect people not to work.

I have an upcoming conference presentation at the AAEA meetings

I'll be at the AAEA Annual Meetings in Washington DC next week.

I'll be presenting at a session I helped organize called: Deception in Economic Experiments: History, Benefit-Cost Analysis, and Recommendations

Here's the description:

Whether deception should ever be allowed in social science experiments is controversial. Some fields, like psychology, embrace deception as a tool. Economists, however, have been slower to embrace deception in experiments, and the AJAE recently instituted a policy where they will not publish results from economics experiments where deception was used. In this session, we bring together several experimental economists to discuss this issue. The presentations will include a history of the use of deception in non-economic experimental work, a review of economists arguing against allowing deception in experimental auctions, and a review of economists arguing for deception in experimental auctions. Finally, our discussants will discuss the other presentations and will help provide an answer to the question: “When, if ever, should deception be used in experimental economics?”

I love this quote by Thomas Sowell

Fracking hearing in Williamsport

Link here

An excerpt:

The caucus's bipartisan representatives and panelists were of the opinion that, overall, Marcellus Shale natural gas production is a good thing. 

U.S. Rep. Thomas Reed, R-N.Y., said the biggest threat to Marcellus Shale development is the anti-fracking movement, and panelist John Augustine, of the Marcellus Shale Coalition, added the industry garners an unusual amount of "misinformation."

The article is interesting, although it was to promote only the benefits of fracking.  I highly recommend reading the comments - very entertaining.   

Property rights involving fracking - Congressman sues

Colorado Democratic Congressman sues to stop person using their own property

An excerpt:

Polis, a Boulder Democrat who represents Colorado's 2nd Congressional District, was shocked to see a fracking operation start up last week on land just across the street from a rural getaway he owns in Weld County near Berthoud.

Through the holding company that has title to the congressman's 50-acre property, Polis this week filed a complaint in Denver District Court seeking a temporary restraining order. His goal is to shut the drilling down.

"I'm going public and talking about it because it's happening to a lot of other people in Colorado," Polis told the Daily Camera. "This can happen to anybody. It can happen to you. It can happen to your neighbor. It can happen to your congressman.

So what's the right thing here?  The question I have is "who owns the property"?  When you ask that question, its pretty easy.  Why should the person who owns the property across from Polis be restricted from using the property in a way that he or she sees fit?  The only reason would be if they're damaging Polis' property, which there is no evidence they're doing.

That being said, some preliminary research at the AAEA annual conference last year did show that when wells were up for fracking (which is in the beginning), immediate property areas do have a slightly lower value.  That researcher also discussed that the negative impact is short-lived.  Could that be the case for a lawsuit?  If so, I think that's a pretty lousy case.  If Polis didn't want to have people drilling on that land, he should have purchased that land himself.

Polis said: "but now its personal".  That could be why he's suing.  Or he could simply be exploiting this opportunity for political gain, as he has been anti-fracking prior to this.

People restricting others from "The Right to Earn a Living"

In April, Susquehanna University hosted a talk by Timothy Sandefur on the right to earn a living.  He detailed many cases where restrictions were put into place to prevent people from working various occupations.

Just yesterday I found two stories within a five minute stretch where it is still happening:

1. This story describes a case that could be taken by the Supreme Court

Excerpt:

• On Wednesday, the Louisiana State Board of Embalmers and Funeral Directors asked the Supreme Court to reinstate its requirement that only licensed funeral directors be permitted to sell coffins within the state, thereby preventing the monks of St. Joseph Abbey from engaging in the unlicensed sale of hand-made wooden caskets.

Does anybody really think having a license will make you better at selling a coffin?  Of course not.  This is simply an act to restrict others from earning a living by people who want monopoly power.  

2. Currently, in Pennsylvania, you don't need a law degree to become a judge.  Some want to change this.

Excerpt:

In Pennsylvania that pesky law degree isn’t needed for more than 500 judicial offices. Judges in several lower courts, including magisterial district judges and the soon-to-be-former Philadelphia Traffic Court, are not required to have law degrees.

This example is a bit more interesting.  Like many restrictions on the right to earn a living, you'll have plenty of people who think: "Oh, but our judges will be so much better if they have law degrees, we should require it".  You get the same arguments for taxi drivers and cosmetologists.  This is a dangerous thinking, however.  I think we should move in the opposite direction with law degree requirements.  We shouldn't require a law degree to represent somebody else in court.  If somebody is skilled at defending people without a law degree, why should we force them to go to law school?  Further, you could have rational defendants who chose to hire a lawyer without a law degree to represent him or her in court.

If the law degree is valuable, it will reveal itself in the marketplace, as people will hire those with law degrees for their representation.  If it isn't, fewer will be hired, their wages will drop, and you'd expect fewer people to go to law school.  That's the marketplace at work.


All over the country, there are restrictions on people's economic freedom to earn a living.  It's sad that in America, in 2013, we still have to have to fight hard for freedom every single day.

Three stories on fracking ...

1.  Study finds no contamination of water from fracking.

This is obviously only one study, but studies that find no harm from fracking should be publicized.  (Just like any study that finds harm is publicized.)

2.  Lord Browne says fracking could bring 50,000 jobs to the UK.

This one is a few months old.  That being said, I think 50,000 jobs could be understating the impact.  The direct jobs may or may not exceed 50,000.  However, if fracking forces down energy prices, which would be expected, that will lead to an increase in jobs as well.  The decrease in energy prices in the US has led to many hundreds of thousands of jobs being created.

3.  Natural gas caucus holding a hearing this Friday.  

I am wondering if I should go ...

Author Ben Mezrich lies in his new book "Straight Flush"

Story here

An excerpt: 

Hintze describes (this book) as “an abomination of a book in virtually every way possible, a grandiose dissemination of lies and omissions that’s almost as criminal as the real actions of the out-of-control kids Mezrich attempts to deify.”

What happened;

1. Mezrich wrote a book titled 

"Straight Flush: The True Story of Six College Friends Who Dealt Their Way to a Billion-Dollar Online Poker Empire--and How It All Came Crashing Down"

2. It was about the founders of the online site "Absolute Poker".  This site had many problems.

3. It was a glowing report of the fun and success of the "six college friends".  

4. It wasn't true at all and poker players are mad.  Absolute poker basically stole people's money and allowed "superusers", which were people who could see everybody's holecards.  

5.  Haley Hintze has a 10-part series on the lies told in this book.  Basically, the book is a work of fiction being sold as non-fiction, and the thousands of poker players who were hurt by the folks at Absolute Poker are mad.

5.  Can the author be sued here?  I'll be curious to see what happened, but I'm not sure how.  The people in the story were made out to be better than they actually are.  Those who are upset are upset that Mezrich lied to glorify thieves.  I'm not sure how a lawsuit could work, however.

Obviously, one shouldn't trust any of his books.  A while ago I had read "Bringing Down the House", and after hearing from actual card-counters, they discussed how he made up a lot in that "true story" as well. 

P.S.  For fun, look through the 1-star reviews on Amazon.com.  Some of these titles of the reviews are funny.  (H/T to the 2+2 pokercast.)

Assorted Links

1.  The folks at the Commonwealth Foundation don't like Gasland II.  (Not a surprise.)

2.  More on the "diet soda can make you fat" arguments.  (HT: Jayson Lusk.)

3.  Tyler Cowen discusses faculty salaries.

4.  Australia is considering a very bad policy.

5. People considering leaving the USA because of regulations.

Link to radio interview on Marcellus Shale project

Link here.

This was with Dave Ramsaran and I, and we got the opportunity to discuss our project examining the social and economic impacts of fracking.  I come during minute 29 and am on for the rest of the show.

More wasteful government spending

Here is an argument that the Zimmerman trial should have never happened.


An excerpt: 

The case was so weak that the local Sanford District Attorney refused to bring charges against Zimmerman. That is why, on the orders of the governor, an outside District Attorney, Angela Corey, had to be brought in to handle it. 

Sanford Police Chief Bill Lee was fired because he also refused to charge Zimmerman with a crime. 

Anybody who followed the trial with even a minimum amount of attention could tell that there was no way the prosecution could prove beyond a reasonable doubt that Zimmerman wasn't acting in self-defense.  The story argues that they didn't even think Zimmerman committed a crime, which also seems likely.

These people just wasted millions in taxpayer dollars, and held in prison a man who wasn't guilty of a crime, only to (as the prosecutor said after the case:) “put the facts out there.”

I'm not sure that blatantly wasting taxpayer money is an offense that can get someone disbarred (I doubt it is, unfortunately). It should be, and all who pushed forward with this case (that are lawyers) should be disbarred.

Forbes "tourist's guide to PA's liquor laws"

Link here

An excerpt:

But what was supposed to be my two-hour bait-and-tackle trip from our rented lake house to Wilkes-Barre and back became a five-hour odyssey of GPS psycheouts, outdated blue law frustrations, and shuttered wine and liquor shops.

It's sad that we now think of this as "normal".

Defending capitalism

Yesterday, while I was on the radio, there was an email was bashing capitalism and I was given about 30 seconds to defend capitalism.  I don't think I did a terrible job, but I certainly didn't do as well as Friedman does in these clips:

Glenn Harrison video on Behavioral Economics

It's about 11 minutes, but definitely worth watching. Link is here.

Assorted Links

1.  California makes it tougher to apply rent control.  That's good news.  California is so backwards about business regulations that I was pleasantly surprised to see this story.   As Sowell says, just because you call the law "rent control", it doesn't mean it does anything to control rent prices.

2. EPA drops claims about Wyoming water being damaged by fracking.  

3.  More evidence that objective research on fracking is needed: AP story on foes of fracking.

But for all its political clout and financial prowess, the industry hasn't been able to get its foot in the door.One reason: Folks like Sue Rapp and Vera Scroggins are standing in the way.

This story discusses these two people, both spend their time opposing fracking.  Are they scientists?  No. Are they researchers?  No.  One is a family counselor.  One is a "retiree and grandmother".  The fact that these two non-specialists have such influence on this issue is sad and pathetic, but not uncommon.  

On radio this Thursday

I'll be on WKOK radio with Dave Ramsaran on Thursday morning.  Dave and I are working together on a research project examining issues with Marcellus Shale.  We've formed what can be called an adversarial collaboration, as we have different political perspectives but are working together to form an objective research team.  

Here is a previous post showing some problems with non-objective research on fracking.

You could tune in at 9:00 AM to hear us on Thursday, July 11th at 1070 AM or you can listen online here.

Assorted Links

1.  Paul Krugman is a bitter little man.  Mankiw doesn't respond in much detail, but does respond.

2.  Despite the fact that yesterday was July 4th, it was a terrible week for freedom in Pennsylvania. 

3.  Vivek Wadhwa discusses whether Bill Gates or Steve Jobs was correct on education.


4.  On a more personal ... On Wednesday our family went to the drive in to see Monsters University.  (See my post about Monster's U here.)

Here's a picture of the place, albeit but an old one.

The drive in is a dying industry, but you wouldn't know it from this place.  It was packed and the movie was great.  With kids, a drive in is a a great way to watch a movie, and I'm a bit puzzled to know why this industry has had so many struggles.

Review of new movie - Bet Raise Fold

Bet Raise Fold has just been released, and it's a great documentary.  A link to the movie site is here.  A link to the kick-starter campaign (expired) is here.

They producers of the movie got a bit lucky in a way.  They started filming this a few years ago.  Then, on April 15, 2011, online poker was essentially taken away from Americans (known as "Black Friday").  This movie discusses much of the history of online poker, but the heart of it is in the stories from three people whose lives they chronicle.  These are three online poker professionals: Tony, Danielle, and Martin.  They got to follow their lives both before and after Black Friday, and it is pretty striking to see what happens.

Danielle

Tony

Martin

Of the characters, the one I related to the most was Danielle.  She was married with kids, and some of the things she described - about her reactions to downswings, about taking shots to hit it big in live tournaments, and how the government took away her dreams - were things I have felt.  For non-poker players, I think she is the one who will certainly garner the most sympathy.  If not for the fact that she was a professional poker player, she would be thought of as the typical mom trying to support her family.

The movie is great and tells a good story.  It hits on many big economic issues, like entrepreneurship, emerging industries, how one newly emerged market creates many ancillary jobs, and how the government has the ability to kill an industry and deprive people of the right to earn a living.

The main shortcoming I saw with this movie is they didn't focus much on what online poker meant for recreational players.  They focused much more on online professionals.  For many people, however, the hobby of poker alone was a huge deal.  For me, while I made money, it also was my main hobby.  Having online poker being taken from those who enjoyed poker, but weren't professionals, was a big deal to many people.  I think it would have been better if there was some discussion of non-professionals.  

This is a bit of a nit picky criticism.  With 100 minutes to work with, a movie can't show everything.  I found the movie entertaining and moving.  I highly recommend it!   Also, my wife and 11 year old (neither are poker players) watched it also thought it was great.

(Note, there is a bit of adult language in the movie, so it isn't completely appropriate for kids, but other than a few curse words it was OK.) 

Great short video describing social cost of carbon

This video is from Bob Murphy's blog.

Two good WaPo stories

1. This Washington post story on the economy in 13 charts is interesting.  I don't even think you need to read the story, just look at the charts.

Here is one of them:

2.  I guess it's Washington Post day.  Here's an article making the same argument Malthus made 100 years ago - that we won't be able to feed the world soon.  Will this encourage more support from the left on GM foods?  I doubt it.