Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Saturday, December 03, 2005

Another Reason to Dislike the Green Party

The U.S. Green Party has revealed a serious anti-Semitic stance:

WASHINGTON, D.C. -- The Green Party of the United States has endorsed a statement calling for a comprehensive strategy of boycott and divestment that would pressure the government of Israel to guarantee human rights for Palestinians.

... "Israel's treatment of Palestinians -- those who are Israeli citizens as well as those in the territories -- is comparable in many ways to South African apartheid, and has resulted in a cycle of violence and lack of security for both Israelis and Palestinians," said Mohammed Abed, a member of the Green Party of Wisconsin. "A stable and just resolution of the conflict requires the full realization of the human rights of Palestinians and Israelis."
Well Geez, Louise! I knew these folks were seriously misguided, but their press release makes no mention of all the attacks on Israel by Palestinians and their allies. It makes no mention of the Oslo agreements or of the intifada that prompted the building of the security fence.

What is with these folks? They sound like classic anti-establishment rebels, looking for a reason to boycott someone.

Hey, Greenies.... If you're looking for a cause, try boycotting those who support Muslim suicide bombings against Israelis.

[h/t to BenS and Judith Blinder for the pointer]

Blog-o-sphere = Pub-o-sphere?
In Canada, It's Tim - o - sphere

John Chilton has an interesting observation that blogs in North America help fulfil some of the function of pubs in Great Britain. In explaining why the British blogosphere lags that of the U.S., he writes:

My guess is that the British blogosphere lags because the Brits have a corner pub culture where the neighborhood gathers daily to chew the fat, argue politics, listen to the local pontificators, and read the newspapers.

There is no such counterpart in the U.S. The U.S. blogosphere is serving some of the functions of the corner pub culture.
Yes, we have pubs in Canada, but we don't have the British atmosphere of daily meetings and discussions within the neighbourhood. In my small town, the local lunch counters play that role. So do Tim Horton's doughnut shops all across the country.

Friday, December 02, 2005

Harper Takes Tories in Wrong Direction

Stephen Harper, leader of the Canadian Conservative party, has declared that one of his primary issues will be to redefine marriage to mean union between a man and a woman. Also see here:
OTTAWA (CP) - Conservative Leader Stephen Harper launched his election campaign Tuesday by steering it straight into the electoral turbulence of gay marriage.

With the starting gun kicking off the eight-week race still echoing in the air, Harper went out of his way to reopen a politically noxious debate, pledging to restore the traditional definition of marriage - provided Parliament supports the idea in a free vote.
Not that I oppose having words retain their meaning, but I disagree with his position. Even though Harper couched his position in terms of giving all MPs a free vote, he is clearly pandering to the social conservatives with this position, and he is foresaking the more libertarian branch of the Conservative Party. His taking this direction concerns me.

In fact, I fear a number of things from this election.

  1. We will most likely end up with another de facto NDP gubmnt (i.e. Liberal minority with NDP support bought via additional major interventionist programmes).
  2. The Tories will attempt to become more interventionist to try to win votes from the middle (which is what happened under Mulroney and which is why the Reform Party emerged with such tremendous success as the Tories swung too far to the left).
  3. Even if the Tories win a minority (with whom?) they, too, will attempt to use our taxes to purchase a majority in the next election rather than stick to small-gubmnt ideals and goals.

For a different perspective, see here.

Typical Election Hand-outs

In the past couple of weeks the Liberals have made tonnes of promises and financial commitments in an attempt to shore up their minority gubmnt and perhaps retake a majority in the next election.

What bugs me about these promises and commitments is that they tend to become entitlements for all time, making it even more difficult to pare down the size of the gubmnt in the future. They also distort people's incentives, making more of us more reliant on the gubmnt, regardless of whether we think such reliance is a good idea in the long run.

Erin Airton makes another point about all these election promises. If these issues were so friggin' important, why didn't the Liberals deal with them during their previous twelve years of power?
It’s bad enough that the Liberal Party stole tax dollars to finance their political operations, but this flood of cynical, win at any cost, spending only hurts the political process in Canada.

Now, your Liberal friends and neighbours will tell you that all of this spending is important, and deals with issues of critical importance to our nation.

If that’s the case, why are the Liberals jamming it into a one week period right before their government collapses under its own corrupt weight?

Surely issues of this magnitude should have been dealt with sometime in the last, say, 12 years of majority Liberal government. To leave it to the dying days of this minority regime only serves to insult those Canadians who actually care about the military, the condition of Canadian First Nations and those who owe their livelihoods to the softwood industry.

Let’s not forget the Liberals have been in government since 1993.

Thursday, December 01, 2005


The Final(?) Name for this blog is


It sounds like a super-hero, doesn't it?
Fighting elitist, interventionist evil everywhere!

Fortunately, a Google search has turned up no other uses of the name.

[thanks to John Chilton, who suggested the name, and to everyone else who contributed ideas for the comic-book series, the action figures, etc.]

I have experimented with hosting the blog elsewhere, but decided to keep it here for now. Eventually, though, I may have to change the url, which will be a real pain for all of us.

The Advantages of Drinking Coke for Breakfast

When I get up in the morning, one of the first things I do is open a can of cola. Most people get their caffeine hit from coffee, but I prefer pop.

And there is further evidence that caffeine in the morning may be beneficial:

... [A] new study has concluded that caffeine can sharpen short-term and working memory just 20 minutes after it is consumed.

Neuroimaging scans conducted at Austria's Medical University of Innsbruck show a brain region crucial to working memory lit up like a Christmas tree shortly after study subjects ingested the equivalent of two cups of coffee.

At the same time, those caffeinated subjects went on to outperform people who had consumed no caffeine in tasks designed to test short-term and working memory, which is the ability to maintain and manipulate new bits of information.
The news reports point out two qualifiers for the study:
  1. Too much caffeine can reduce your productivity and be harmful. I.e., eventually the marginal physical product of caffeine becomes negative.
  2. It is possible to build up an immunity to the effects of caffeine. My conclusion is that for caffeine to have efficient benefits, one should de-caffeinate oneself on a regular basis on days when peak productivity is less important.

My beverage of choice in the morning used to be Diet Vanilla Coke, but that variety of Coke is no longer available. I now tend to prefer Coke Zero, a form of Diet Coke that tastes more like original Coke than the standard Diet Coke; I also like Diet Dr. Pepper. On de-caf days, I drink diet caffeine-free cola or diet ginger ale or even herbal teas.

Can 10,000 Delegates Possibly Be Wrong?

In "The Winds of Crisis" [Nat'l Post, Nov. 29, FP Comment, p64 ($), h/t to Jack], Terence Corcoran writes about the meeting taking place in Montreal about global warming:
On the rock-solid assumption that 10,000 people from 180 countries cannot possibly reach a rational conclusion on any subject, it follows that the climate meeting launched yesterday in Montreal is destined to do something irrational. The only question is: How much crazier can global climate policy get?

The last major United Nations climate control operation was the Kyoto Protocol, a carbon emissions plan so far off road that most nations, including host Canada, have been forced to ignore it as unworkable and unattainable.

Execution of Kyoto would plunge the world into an energy crisis of massive growth-killing power.

Kyoto expires in 2012. If they couldn’t generate a global energy crisis with Kyoto, they intend to try again with new, tougher targets for a post-Kyoto era.

Collective delusion knows no bounds. No politician could sell carbon-reduction plans at home without getting laughed out of office. That’s why we have Montreal, where the absurdity can be glossed over by having 10,000 people — politicians, bureaucrats, NGOs, industry types — locked up for two weeks and forced to produce a declaration to end the world economy as we know it. If everybody’s doing it, then it must be OK.
I have a friend who has written some items about global warming that have won world acclaim. He is equally skeptical, saying,

A few years back ... , my coauthor and I discussed that fact that Canada would not remotely have the capability of achieving the Kyoto targets. We debated whether the Liberals would be able to ratify it assuming the truth would eventually haunt them politically. I was of the view that they would ratify, then not live up to their commitment and just say they did, while paying no political price. I did not have any insight except shameful cynicism to go on. They did ratify, they committed to reduce CO2 production rates to 1990 rates but rates are now 24% *larger * instead of declining.

This phenomenon seems to be widespread among those countries who signed Kyoto. (Ironically, the US has been vilified for not signing onto Kyoto but has only a 16% rate increase in the same period.) Now signing onto Kyoto will be put forward in the election as a great achievement for the Liberals. So I suppose I was right, not that it does me or anyone any good.

Also, according to my forecast about "coincidences" Nature's most recent issue just happens to have a study claiming that global warming is already responsible for 150000 deaths...
Nature is becoming like the National Enquirer. They really cannot help themselves.

Wednesday, November 30, 2005

Best Biz Blog in Canada!!

I've been urged by a couple of friends to mention that this blog (under it's old name, "The Eclectic Econoclast", is in the running for being named the best business blog. Please go here once a day and vote for The Eclectic Econoclast:

And urge your friends (and readers if you have a blog) to vote for The Eclectic Econoclast, too.

Thank you.

Worthwhile Canadian Initiative

Are those three words inherently boring? Somebody thinks so:

The New Republic once claimed to have discovered the most boring headline ever written: Worthwhile Canadian initiative . The editors argued that the headline ingeniously combined three inherently boring words in such a way as to dissuade even the most adventurous reader from forging ahead into the actual story.
Let me add that our favourite colour is grey and our favourite dessert is tapioca pudding.

[Thanks, I think, to Alex for the pointer]

Update: As Brian Ferguson points in his comment, if you think those three words are boring, think again and check out the blog of the same name: Worthwhile Canadian Initiative.

I Have a Ph.D. and so You Should Trust Me to Make Good Decisions on Your Behalf

To be quite honest, after I received my B.A., I thought I knew everything. I thought that I, and lots of people like me, could make the world a better place if only people would let us make more of the decisions.

This was waayyyy back in the previous century, before people talked about bounded rationality. But that's what we had in mind. Essentially, our hubris permitted us to imply, "We're smart, and you're not, so let us run your world for you."

And then when people in power continued to make decisions with which I disagreed, I made a rather precipitous slide into quasi-libertarianism.

This paper ($) summarizes the problems of hubris-laden paternalism. Here is a summary which helps explain my change, way back then:
Soft paternalism requires a government bureaucracy that is skilled in manipulating beliefs. A persuasive government bureaucracy is inherently dangerous because that apparatus can be used in contexts far away from the initial paternalistic domain. Political leaders have a number of goals, only some of which relate to improving individual well-being. Investing in the tools of persuasion enables the government to change perceptions of many things, not only the behavior in question. There is great potential for abuse.
[h/t to Tyler Cowen at Marginal Revolution. Be sure to read the comments, too!]

Tuesday, November 29, 2005

Speed Bumps and Slides

At The University of Western Ontario, students must take two years of courses before they can be admitted to UWO's honours programme in business at the Richard Ivey Skool of Biznezz, a programme which is very highly rated and into which admission is extremely competitive.

I was speaking with one of my colleagues the other day, and we were bemoaning the fact that many of our students regard economics courses as speed bumps on their way to bizskool. The students need solid or high A averages to get into bizskool, and the economics department at UWO has traditionally had some of the lowest averages on campus [perhaps a reflection of the testosterone poisoning suffered by economists?].

At the same time, a professor in chemistry was commiserating because undergraduate students view chemistry courses as speed bumps on their way to med skool.

In contrast, socionomology courses are slides on the way to an MSW.

The Efficient Markets Hypothesis

This site provides one of the most masterful summaries of the Efficient Markets Hypothesis that I have ever read. It is well-written, and it uses little (if any) jargon.
Here is the opening paragraph [h/t to BenS]:

An issue that is the subject of intense debate among academics and financial professionals is the Efficient Market Hypothesis (EMH). The Efficient Market Hypothesis states that at any given time, security prices fully reflect all available information. The implications of the efficient market hypothesis are truly profound. Most individuals that buy and sell securities (stocks in particular), do so under the assumption that the securities they are buying are worth more than the price that they are paying, while securities that they are selling are worth less than the selling price. But if markets are efficient and current prices fully reflect all information, then buying and selling securities in an attempt to outperform the market will effectively be a game of chance rather than skill.

The Efficient Markets Hypothesis is in direct opposition to what is said in this book (a recent advertiser on An Econoclectic Perspective).

One of the best books I have read on this topic is Burton Malkiel's A Random Walk Down Wall Street, though I know there are others that have been written more recently.

Note: I wrote earlier about my surprise that our pension fund managers seem to think there are aspects of the Canadian financial markets that cannot be described by the efficient markets hypothesis.

Monday, November 28, 2005

More on More BBC Bias

A BBC reporter told her audience that she cried during Yassir Arafat's funeral:

She told listeners that "when the helicopter carrying the frail old man rose from his ruined compound, I started to cry..."
Her piece attracted hundreds of complaints from listeners.

... The corporation's head of editorial complaints initially cleared From Our Own Correspondent journalist Barbara Plett of bias.

But a listener appealed and yesterday the Governors' Programme Complaints Committee overturned that ruling.

Ms Plett's mention of her tearful response "breached the requirements of due impartiality", the governors said.

As one of the critics said, there is no way a reporter would dream of saying the same sort of thing during the funeral of Ariel Sharon.

In many respects, I am glad Ms. Plett said what she did because it reveals her underlying biases so clearly. I can imagine many others at the BBC share her views, too. I can only hope they will slip up and reveal their biases as she did.

Sunday, November 27, 2005

Political Economy Compass

Former student, Ryan, sent me this test of one's economic and political leanings. I ended up right-wing on economics (I presume this means market-oriented) and slightly libertarian politically (vs. authoritarian), according this test, just a shade to the left of Milton Friedman.
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