EclectEcon

2006-09-16T10:38:00.001-04:00

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The Econoclast,

EclectEcon has moved; please update your links, etc.

Retirement Calculator for Canadians

2006-01-01T01:00:00.000-05:00

Here is a really simple and basic retirement calculator for Canadians.
It takes OAS and CPP into consideration, along with pension funds and RRSPs.

Topic: Economics

[Thanks to BenS for sending the link.]

Nobel-Prize Winning Research Rejected

2005-12-31T00:57:00.000-05:00

Thanks to BenS, here is a link to a paper that chronicles all the research that was rejected by journals but which later, when published elsewhere, led to Nobel Prizes for the scholars.

Sadly, the author seems to see this as some deviation from the ideal.

[M]ost of [the] instances discussed above deal with genuine resistance to scientific discovery and it is illuminating to ascertain some of the reasons why such a resistance exists in the first place.

A possible explanation that could motivate peer resistance to scientific discovery lies in the fact that new theories or discoveries often clash with the orthodox viewpoints held by the referees.

... In other instances the problem is that referees did not appreciated the potential or the interest of the new discoveries. ... Something is wrong with the peer review system when an expert consider[s] that a manuscript is not of enough interest to be published and later the work reported in such rejected paper earn[s] the Nobel Prize to their authors.

A more positive interpretation is to see these errors of commission and of omission as part of a normal, evolutionary process.

I see them as something to be expected, given scarcity. More importantly, I see the results as evidence that the system works! It is a ringing endorsement of competition among academic journals: if one journal rejects a brilliant, path-breaking article, another has an incentive to publish and move up in the citation rankings. Without that competition, some of the break-throughs might never be published.

For what it is worth, I noticed that the author had no instances of early journal rejection of Nobel-Prize winning work in economics.

The Three-Inch Conspiracy, Inflation, and Money Illusion

2005-12-29T01:52:00.000-05:00

What is the average difference between the true height of a basketball player and the height listed in the programme?

I had friends 40 years ago who used to laugh about being listed at 6'2" when they were really only 5'10" or maybe 5'11" with shoes on. This deception has been going on for decades; everyone knows it and everyone adjusts.

Here is more, buried in the comments section of this posting about Yao Ming. [h/t to Tyler Cowen's piece on Yao Ming for leading me there]. The consensus there seems to be that the average amount of over-statement of basketball players' heights is about 3".

Is the Three-Inch Conspiracy like simple inflation? Not quite, since inflation is usually represented as a rate of increase, not a specific amount of an increase. For the conspiracy to be be like inflation, it would have to be a 5% conspiracy or something like that.

Is the Three-Inch Conspiracy like money illusion? In some ways it is. While "everyone knows" the heights of basketball players are over-stated in the programmes, no one knows for sure how much each player's height is over-stated. And some people rely on official height data, even though the data are inaccurate. That seems a bit like money illusion to me.

Mutual Funds and MERs

2005-12-29T01:06:00.000-05:00

Recently, I attended a social gathering where there were several fund managers for a firm that sells mutual funds. I commented with some question about the high management expense ratios [MERs] for their product and expressed a preference for passive, index-based funds with very low MERs (as I recall, this was after one of my acting gigs, and they knew me as an actor, not as an economist).

Their response was,

What does the "M" in MER stand for?
Management! We manage the fund so it does better.

I don't believe them. On average, especially in well-developed markets like the US markets, index funds tend to outperform managed funds, especially once all the fees are taken into account.

Now there is a calculator/analyzer available to help assess the fees and expenses involved with mutual funds. According to the Washington Post [reg. req'd]:

The online tool now contains up-to-date fee and expense information on practically all of the more than 18,000 mutual funds and 160 Exchange Traded Funds (ETFs)...

More than 50 million American households have money in mutual funds. What NASD has done is to go beyond just telling investors they need to scrutinize fees and expenses before investing in mutual funds. The regulator has provided a much-needed tool to help people put that advice to action.

Although Jeff Cosford has sent me some evidence that counters the theory, I still, in my blissful and rational ignorance, subscribe fairly strongly to the Efficient Markets Hypothesis.

France: The Ted Bundy of European Nations

2005-12-28T03:47:00.000-05:00

From Vile France, by Dennis Boyles (h/t to BenS) [I quoted the first part of this material earlier] :

In very large numbers, the French don’t like us…What we mistakenly see as a craven, anti-Semitic, insecure, hypocritical, hysterically anti-American, selfish, overtaxed, culturally exhausted country, berefit of ideas, fearful of its own capitualation to Islam, headed for a democraphic cul de sac, corrupted by lame ideologies, clinging to unsupportable entitlements, crippled by a spirit-stomping social elite and up to its neck in a cheesy soufflé of multilayered bureaucracy is actually worse than all that. It’s vile.

… In just the last half-century or so, France has been guilty of eagerly abetting the Holocaust; perpetrating more postwar anti-Semitic acts than any other country in Europe; enabling and supporting state-sponsored genocide and slaughter in Africa and Asia; attacking unarmed civilians on foreign territory; arming enemies of Western democracies; treating its young with disain and its elderly with a neglect that is often fatal; suppressing conventional human rights, especially the right to free speech; protecting murderers and war criminals from justice; pursuing a foreign policy in which mendacity is a strategy used against both friends and enemies; polluting the earth while rhetorically demanding planetary hygiene from others; pursing illegal trade activities; engaging in massive, systematic corruption and greed; worshiping self-seriousness; and undermining American foreign policy wherever possible, no matter how many lives that costs. France looks great and seems swell but it acts hideously. It’s the Ted Bundy of European nations. (Denis Boyles, Encounter Books, 2005, p.5).

I don't know whether the London Public Library has ordered the book, yet [here is my earlier post on the subject].

Co-mingled Recycling at UWO

2005-12-28T00:18:00.000-05:00

Several (many?) years ago, The University of Western Ontario embarked on a massive recycling programme. There were

Blue boxes for fine paper only
Blue swing-top cans for glass bottles
Blue swing-top cans for aluminum cans
Blue swing-top cans for plastic bottles
Blue swing-top cans for newspapers, and
White cans for other waste

That is a lot of receptacles! The hallways in some places seemed completely lined with recycling containers for different types of waste.

Something has changed. Maybe people at the university were not sorting properly, thus making the recycling more expensive (are literacy levels of incoming students deteriorating that badly?); or perhaps the sorting was not very beneficial relative to its costs. At any rate, most of the blue cans now have big, supremely and pretentiously redundant labels:

Co-mingled
Beverage Containers
Glass, Plastic, Tin

Co-mingled? C0-mingled???

Why didn't they omit that unnecessary word and use "aluminum" instead of "tin"?

When is the last time you saw a tin beverage container, even a tin-coated one?

And when was the last time you used the self-redundancy, "co-mingled"?

Here is a piece I wrote about recycling many years ago.

How Much of a Worry is Global Warming?

2005-12-27T01:59:00.000-05:00

Not much, if you accept the research reported by Joseph Bast in a report put out by The Heartland Institute. (also see Taken by Storm).

Here is a summary of just a few of the points made by Bast in his commentary on Michael Crichton's State of Fear:

... [T]he message of State of Fear has serious public policy consequences:

Most of the environment and health protection regulations in the U.S. ought to be reformed so they address real rather than imaginary risks, and concentrate on what works instead of the liberal orthodoxy of big government solutions to every problem.

The U.S. is quite right to stay out of the Kyoto Protocol--the global warming treaty--and ought to be doing more to persuade other countries of the world that the protocol is unnecessary, premature, and unworkable.

For more on global warming, in addition to the books shown below, I recommend this recent post at Cafe Hayek and this one by the ever-vigilant group at London Fog.

For more, see the new site for this blog.

Self-Serve Check-outs

2005-12-26T03:22:00.000-05:00

I had never seen or heard of "self-serve" check-outs until I visited my son in Houston a couple of years ago. To use one, you scan your own merchandise, scan your credit or debit card, bag your own groceries, and away you go.

My first reaction was, "Geez, I wonder what the inventory shrinkage (shop-lifting) is with this system."

Don Boudreaux of Cafe Hayek wondered the same thing. He attributes their success to trust and honesty.

The fact that the number of self-checkout lanes is increasing tells me that these lanes are proving to be successful — proving to be worth their costs. In turn, this fact tells me that the people who shop in these stores are generally honest. The number of cheaters, although surely positive, is not great enough to make the provision of self-checkout lanes a losing proposition for retailers.

Phil Miller has additional intriguing insight: Employee theft is generally a much more serious problem than shop-lifting.

While I was working on my Master's degree, I worked as an assistant manager for a well-known pharmacy chain and in terms of theft prevention, our number one focus was employee theft, not customer theft. My fellow managers and I went to seminars where we watched surveillance camera films showing various employees stealing from their stores. We also heard stories about employee theft. The cameras that were installed to identify theft were installed over the cash registers.

Employee theft takes lots of forms. Employees can steal cash, merchandise, credit card numbers etc. They can also help their friends steal stuff by placing unscanned merchandise into bags with paid-for merchandise.

By substituting capital for labor at the checkout stands, retail stores can help combat employee theft. With the self-service stations, I'd argue that since there are fewer employees handling transactions, many stores are actually preventing theft from occuring.

At least two questions linger for me:

How do the stores deal with merchandise that has the electronic theft protection embedded when it goes through the self-serve checkout?
We don't have them in Canada, yet. Why not? Is the relative price of labour (compared to capital) lower in Canada than in the U.S.? If so, not much. Or is Canadian retailing irrationally and inefficiently behind the times?

A Terrific Gadget, bordering on being a necessity

2005-12-25T02:36:00.000-05:00

Last week, I bought one of these: an iRiver AFT-100 FM transmitter.
I use it to listen to podcasts through my car's sound system from my MP3 player while commuting to and from the university. It works really well, is easy to figure out, and has considerable flexibility (including three different, user-selectable, FM pre-sets, which come in handy if you have several different places on the dial that are clear at different parts of a long commute). Playing back music or interviews from an MP3 player through the car's stereo system works much better than driving with headphones (and is safer, too)!

I know there are many different devices on the market that do the same thing, but this one does the job really well for me.

Spider Stalemate

2005-12-25T01:02:00.000-05:00

Some time ago, I posted a question about what happens in Spider solitaire when you run out of cards in the piles across the top, and the game won't let you deal any new cards because each column or slot must have at least one card in it. Some of the commenters did not understand what I was asking, but Chris (one of my brighter intro students) did. Furthermore, he sent me this graphic to show that, indeed, the game does essentially lock up or stalemate:

Those of you who are familiar with the game will see that in this play, Chris used the single-suit version and played nearly all of the cards from the piles across the top, leaving him with only nine cards plus an empty slot. The box in the middle says, "You are not allowed to deal a new row while there are any empty slots." But he doesn't have enough cards left in the piles to fill all the slots.

I'd call that a stalemate, not a loss.

Thanks, Chris!

Stroke Recognition: More Information Beyond the 3 Basic Questions

2005-12-24T01:07:00.000-05:00

Last March, I wrote about stroke recognition. We have printed this information and posted it on our fridge:

The warning signs of a stroke are:
Sudden numbness or weakness of the face, arm, or leg, especially on one side of the body.
Sudden confusion, trouble speaking, or understanding.
Sudden trouble seeing in one or both eyes.
Sudden trouble walking, dizziness, loss of balance or coordination.
Sudden, severe headache with no known cause.

The three easy questions are:
ask the individual to smile.
ask him or her to raise both arms.
ask the person to speak a simple sentence.
If s/he has trouble with any of these tasks, call 911 immediately, and describe the symptoms to the dispatcher.

But there is much more that is worth knowing. From Jack:

There is an additional bit of information to be aware of: the possibility of reversing the impact of a stroke if one gets proper medical treatment within three hours of symptom onset. This applies to the majority of strokes which are caused by blockages in blood supply to part of the brain. It does not apply to those caused by bleeding into the brain. The steps required for possible stroke 'reversal' are:

1/ Get to a major hospital emergency department as soon as possible, and certainly within three hours of symptom onset.

2/ Bring up the possibility of administering clot-busting drugs to the emergency MD immediately; if he/she is on the ball and facilities permit, an emergency CT scan should follow very quickly. The CT is necessary to detemine if the stroke is caused by a blockage /clot (good) or a bleed (bad). If it is the former, then you should receive a clot busting drug intravenously. All of this ideally transpires within a three hour time frame of symptom onset.

Don't assume this will automatically happen. [There are instances when it hasn't.]

This link is an older statement for the public, but still applies.

And this link gives a broader context to treatment.

Christmas-nomics

2005-12-23T01:30:00.000-05:00

Two totally unrelated items about economics and Christmas:

Daniel Gross writes in Slate that Christmas tree sales are a good concurrent indicator of consumer spending during Christmas.
Christmas lights and timers. With the invention of the little LED Christmas lights that use very little electricity, it probably makes no sense to buy a $30 outdoor timer that will turn the lights off during the day. I haven't done the calculations, but I can readily imagine that leaving even 120 of these lights on for 24 hours a day for a month adds no more than a few dollars to the electricity bill. So why bother with a timer? In fact, if the prices represent the opportunity costs of using the scarce resources in various ways, it would downright anti-social and inefficient to buy a timer for these lights.

Update: There's more here, at the new site for this blog.

How to Attract a Mate

2005-12-23T00:09:00.000-05:00

This advice is for males.

I recently listened to the podcast interview of Donald Cox by Russell Roberts. Near the end of the podcast, they agreed there are only three ways for men to show they have the financial wherewhithal to sire large, healthy clans:

Laminate your income tax return and flash it around. Failing that,
Buy an expensive car or
Buy an expensive watch [reg. req'd, h/t to BenS for the link].

While the list is amusing ($1.5m for a watch!!??), I can think of several other possibilities.

Buy expensive gifts for prospective partners.
Make huge donations to specific charities (Bill G appears to have learned this well).
Wear expensively tailored clothes.
Alternatively, wear a military officer's uniform.
Order only the best wines.
Snub the PLO.

I'm sure there many more. Feel free to add to the list.

Since I would lose any of these competitions, I'm delighted to live in a monogamous culture.

Might Israel Try to Destroy Iran's Nuclear Weapon Capability?

2005-12-22T00:25:00.000-05:00

With the recent hostile speeches by Iranian President Mahmoud Ahmadinejad, Israel must take a very cautious stance. On the one hand, he sounds like someone who might very gladly use nuclear weapons against Israel just to get rid of the Jews, in which case a pre-emptive strike is called for. On the other hand, he might be attempting to provoke an attack by Israel, with the hope of cementing other Muslim support against Israel.

Stratfor has an interesting take on how Israel might attack Iran, should they decide to do so. [subscription req'd; h/t to JP]

Iranian President Mahmoud Ahmadinejad's latest inflammatory statements, in which he called the Holocaust a "myth" and suggested that Israel's Jews be relocated to Europe or even Alaska, are part of a series of provocations that have severely escalated political tensions between Iran and Israel. Furthermore, Israeli military officials have said that Iran is within months of being able to produce nuclear weapons. Because of its extreme vulnerability to a nuclear attack, Israel's threshold for using the military option to prevent Iran from acquiring nuclear capability is lower than the United States'. Should Israel decide to attack Iran's nuclear facilities, the operation would be risky, difficult and politically delicate -- but not impossible.

The major problem would be forming the political alliances that would free up some air space for the IDF to fly through.

Then again, consider this by C. Hart of WorldNewsDaily:

Most media attention has focused on when Iran might have nuclear capability and if Israel should act against Iran independently. Little attention has been paid to the possibility of an Iranian pre-emptive strike against Israel, despite the fact that this remains a major concern of Israel's military advisers.

Worried About Avian Flu? Don't Try to Stockpile Tamiflu via the Internet

2005-12-22T00:04:00.000-05:00

It seems that many people are not only concerned about the possibility of an Avian Flu pandemic, but they are trying to prepare for it by stockpiling Tamiflu, despite repeated warnings (see here and here) that it may not be very effective in most instances.

But of course stockpiling Tamiflu through regular channels is difficult. The gubmnt has indicated it will commandeer much of the supply for whomever it deems most in need. And at current, gubmntly-induced artificially low prices, there is an excess quantity demanded. Not surprisingly, many people wishing to hedge against the possibility of an avian flu pandemic are turning to the internet to order and stockpile Tamiflu. Let's hope it has some placebo effect because much of the vaccine ordered over the internet turns out to be counterfeit, with possibly no more than vitamin C as its main ingredient [h/t to Jack for the link].

[A]gents have seized 51 separate packages, each containing up to 50 counterfeit capsules labeled generic Tamiflu.

The fake drugs had none of Tamiflu's active ingredients, and officials were running tests to determine what the capsules did contain. Initial tests indicated some vitamin C in the capsules, said David Elder, director of the Food and Drug Administration Office of Enforcement.

... Agents became suspicious because Tamiflu is produced by Swiss pharmaceutical manufacturer Roche, and there is no generic version available.

This is to be expected. When the gubmnt sets a price ceiling, black and grey markets develop, and it is much more difficult to assess quality and reliability, and to enforce contracts, in these markets.

How to Attract a Mate

2005-12-21T21:42:00.000-05:00

Laminate your income tax return and flash it around. Failing that,
Buy an expensive car or
Buy an expensive watch [reg. req'd, h/t to BenS for the link].

While the list is amusing ($1.5m for a watch!!??), I can think of several other possibilities.

Buy expensive gifts for prospective partners.
Make huge donations to specific charities (Bill G appears to have learned this well).
Wear expensively tailored clothes.
Alternatively, wear a military officer's uniform.
Order only the best wines.
Snub the PLO.

I'm sure there many more. Feel free to add to the list.

Since I would lose any of these competitions, I'm delighted to live in a monogamous culture.

Advice for IT Start-up Companies

2005-12-21T00:47:00.000-05:00

Many people seem to have the notion that the way to get rich in the information technology industry is to start a company and then sell it to Yahoo, Microsoft, or Google. That kind of thinking is a clear example of the ex post, ergo propter hoc fallacy. Just because some entrepreneurs have made money by doing this, it does not follow that (a) this was their goal, or (b) setting out to build a company that you can sell is a good strategy. Generally speaking, the biggies won't want to buy your company unless it is successful and could make a lot of money on its own anyway.

Here is Paul Kedroski on this topic:

If you are building a startup solely with the intent of flipping it to one of the majors then you are playing Russian roulette using a gun with five full cylinders, and one cylinder containing a bullet that flits in and out with 50% probability. It is, in other words, a stupid game, one that ex post looks more rational than it would truly be to have done ex ante.
The best way to get purchased by anyone -- GYM included -- is to build a great team, find a large and growing underserved market, build a great product/service for which people will pay more than it costs to provide, grow faster than the market, and stay paranoid that a hundred other companies are gunning for you all the time. If that sounds a lot like the path to building a company, not merely one that is built to flip, it isn't just a coincidence.

Building companies to flip is a dumb exercise, one that more often than not produces neither a company nor flipping.

One possible exception to this strategy emerged in the comments (I recommend you read them all): If part of the plan for obtaining venture capital for a startup must include the possibility for a sell-off to GYM, then by all means it is worth thinking about and planning for that possibility.

Trade Restrictions and Disaster Relief

2005-12-21T00:16:00.000-05:00

What is the best way to amplify the damaging effects of a natural disaster? From The Emirates Economist:

Use the strong arm of the government to prevent foreign suppliers from rushing in when domestic supplies are disrupted.

Who loses? The consumer.

Of course, if foreign suppliers rush in, domestic suppliers will scream about "carpet-baggers" and "foreigners" ripping them off and exploiting them. But these complaints will be smoke to disguise their attempts to protect their local market power.

It is sad, but politicians will tend to respond to the arguments of domestic suppliers, not consumers, and the effects of the disaster are made all that much worse as a result.

As an example, EmEc links to this item, which points out that hurricanes Katrina and Rita severely damaged the U.S. sugar crop, thus shifting its supply curve to the left and nearly doubling the price of sugar. Opening the borders to imported sugar could help reduce the size of this effect...

Gift Shopping on the Internet

2005-12-19T12:43:00.000-05:00

. . . . . .

Composite Drawlings Praises Bolton's Job at UN

2005-12-19T03:09:00.000-05:00

Rebekah K. at Composite Drawlings also writes a weekly column for her local newspaper; fortunately, it is also available online for us all to read. In a recent piece, she praises the job John Bolton has been doing at the United Nations.

First, at the beginning of this month, Bolton told the UN — as they signed the Palestinian Resolutions which, among other things, condemn Israel for defending itself against terrorism and call for Israel to surrender even more land to the people who were trying to eliminate them — they were increasingly demonstrating their irrelevance.

... Following that scathing speech, he came out three days later (after another suicide bomber attacked and killed innocents in Israel) with a few choice words for the Security Council: "you have to speak up in response to these terrorist attacks. It's a great shame that the Security Council couldn't speak to this terrorist attack in Netanya, but if the Council won't speak, the United States will."

Bolton has been pressing the members of the United Nations to start cleaning up their acts, has demanded that those who sit on the Human Rights Commission have at least made an effort to protect basic human rights (no more China, shooting civilians for sitting in protest against local land-grabbing governments, no more Zimbabwe and its bulldozing homes of the poor, no more Cuba and imprisoning good people for having the chutzpah to contract AIDS, no more Iran or North Korea or any other nation whose record on human rights is blatantly abysmal). He’s informed the UN that the corruption which seems to flow from the top down must be cleaned up, or else we will find — or build — a new treaty organization which is willing act both responsibly and effectively.

... Dang, it must gall the folks who wanted him filibustered into oblivion! He came in fast and low, under the radar, and slipped in by interim appointment, and now there’s nobody to stop him from wreaking havoc on the heretofore smug, slimy oysters at Turtle Bay.

The Best Christmas Present You Can Give a Young Person

2005-12-19T00:38:00.000-05:00

Smash their calculator(s).

I am semi-serious.

Last week I had several first-year university students complain because I will not let them use calculators on exams, and they did not know how to calculate a present value problem which was basically the following:

NPV = 1210/(1 + .1) + 1210/(1 + .1)(1 + .1) - 2000

I know I seem like a curmudgeon, but this reaction from university students (who presumably had "A" averages in secondary school) is frightening and discouraging.

Depreciation of the U.S. Dollar:a question of "when", not "if"

2005-12-18T12:12:00.000-05:00

The U.S. dollar has remained strong during the fourth quarter of 2005 despite continuing trade and U.S. federal gubmnt deficits. There are two related reasons for its continued strength:

Anticipated continued tightening by the Fed, albeit at a slower pace, has kept U.S. interest rates attractive for foreign (and U.S.) short-term financial capital.
Continued unease about international politics makes the U.S. economy seem less risky than many other options. As I asked last spring, "Where else would you put your money?" I realize there are many options, but just how risky and how attractive are they?

Ben Carliner pointed out last month that the strength of the U.S. dollar is not likely to persist:

Well, in the short term at least, America’s twin deficits just don’t seem to matter. The markets’ attention is elsewhere, and for much of the world, continued economic growth is predicated and strong US demand. Unfortunately, in the long run, current account deficits do matter, and putting off the day of reckoning will make the correction, when it does come, all the harder.

Boom!
Nouriel Roubini has a similar outlook:

In 2006 the structural medium term factor that will tend to weaken the dollar - the large and growing US current account deficit - will reassert its role while the short term cyclical factors that have lifted the dollar this year will tend to weaken their effect. So, at the end you cannot fight the laws of gravity as the cyclical forces that have defied such gravity are temporary while the forces that will cause a gravitational fall of the US dollar are as strong as ever.

Ooomph!
However, Brad Setzer suggests that maybe the rest of the world is willing to keep financing the U.S. twin deficits for quite some time:

Of course, the US can only spend more than it earns so long as the rest of the world is willing to finance the US.

And the People's Bank of China is certainly aware of that it will take large losses on its dollar portfolio if it continues to finance the US. Last I checked, Yu Yongding sits on the PBoC's monetary policy committee, and he was pretty clear about this in a recent speech.
... So far, though, Yu has not convinced the Chinese government to cut back on its reserve accumulation: Chinese reserve accumulation has grown every year since 2000. And so long as China, Russia and Saudi Arabia's central banks are as willing as the markets to finance the US - if not more willing - the US seems set to keep on spending.

So when will they stop, if ever?

For a set of invaluable links and references on the economics of foreign exchange rates, see this post at The New Economist.

The Sound of Music:Best Movie of All Time?

2005-12-17T19:55:00.000-05:00

Many members of The Philistine Liberation Organization have argued persuasively that The Sound of Music was the best movie ever made. In fact, a discussion of this argument is scheduled for the next PLO Conference.

So you can imagine the delight of some PLO members as we learned that The Sound of Music was going to be televised this evening. Correspondents were Rondi Adamson, Alan Adamson (co-blogger at Curling), along with EclectEcon.

EclectEcon: The best movie ever made is on tv tonight on many different channels at 8pm.

Time to fire up the old microwave (to make some popcorn)!

Alan: A night for a major PLO party!

My TV Guide says 7pm. Would not want anyone missing what there is to be done with Maria!!

Rondi: It's on at 7! Yes, I've known about this all week and have been REALLY looking forward to it. Following the PLO theme, I thought I would have CheezWhiz and crackers, rather than something as classy as popcorn.

Alan: I have to confess, after my generally positive experience with King Kong, I am thinking of tuning in tonight.

Rondi: I'll be very happy to have converts of any kind, even if they're not whole-hearted! (Hey, you can blog about it!)

EclectEcon: This entire exchange is definitely blogable. Any objections?
confession time: I'll probably watch the NFL instead.

Alan: please blog - my guess I will be back and forth between the nfl and SoM

Rondi: None from me. You might want to mention I'll be partaking of some pretty classy Cotes du Rhone, as well. I'm not a *complete* rube! Mmm...cheez whiz and red wine...

(Al, you'll see, at the end, it doesn't indicate in any way, shape or form, that the von Trapps walked to Switzerland in 24 hours! That is, if you stay awake...)

Alan: I am sure I will be asleep at the point of their amazing trip from Salzburg to Switzerland. I am willing now to accept that the movie makes no commitments about how that magic heppened. Or how long it took.

EclectEcon: Well, I didn't mean I'd live-blog it! Rondi, you should do that.

But live-blogging is generally more successful if it is well-advertised, as in, "Hey folks, next Xday at 7pm I'll be live-blogging the Sound of Music."

Rondi: Nah, the Sound of Music is best enjoyed in a relaxed manner...

Alan: Man is it good!! Ollie [his cat?] and I are totally hooked now.

Rondi: It is awesome.

Jeffery Sachs: East Coast Elitist Interventionist Who Knows How to Solve the World's Problems

2005-12-17T01:18:00.000-05:00

Professor Jeffrey Sachs, Columbia University, is a very smart man. He knows a lot and knows how to express himself better than I could ever hope to. I recently listened to the interview with Sachs on Radioeconomics.com. It was everything I expected.

The solutions to world poverty (and other problems) proposed by Sachs are vague. They sound great, in that they involve promoting investment (he explicitly mentions building roads) and holding project managers accountable.

You know what? That is pretty much the same stuff we were taught by east-coast liberal interventionists 40 years ago, when I was an undergraduate. They know best.

Here is an interesting example: Sachs seems to think malaria would be wiped out if people would just donate a buck or so to help buy mosquito netting for all the poor people in Africa. And just what does Sachs think would happen to this netting? I am willing to bet that after a year, less than a third would still be in use as mosquito netting.

My solution to world poverty? There clearly are no quick fixes, but here are some things that will help future generations:

Stop listening to planners and interventionists who, no matter how sincerely they care, will end up enriching themselves and, especially, society's rent-seekers.
Create secure property rights and legal entitlements. Exchange and growth cannot be fostered without these as part of the framework.
Promote free trade, both internally and externally.

Along these same lines, in a recent editorial in the NYTimes [reg req'd], Tim Harford (the Undercover Economist) points out that reducing internal barriers to trade would go a long way toward improving efficiency and promoting development in many countries.

Part of the problem, of course, is that landlocked African countries are linked to the outside world by long, decrepit roads and underdeveloped ports in neighboring countries. But determined growers can move bananas along even lousy roads. The real problem is elsewhere: three-quarters of delays are the result of red tape, not port handling or inland transport. These delays, caused by senseless bureaucracy, unnecessary forms and archaic inspection practices, can often be eliminated with a stroke of a pen by a country's chief executive. Even the more sophisticated reforms, like introducing electronic filing, or using software to guide sensible risk-based customs inspections, require only small outlays. What's more, such reforms increase the interception of smuggled goods and discourage corrupt customs officials.

And therein lies the difference between The Economic Way of Thinking and the Elitist Interventionist Way of Thinking: Sachs wants to build roads; Harford wants to cut red tape.

. . . .

TypePad's Woes

2005-12-16T10:50:00.000-05:00

Something isn't working at TypePad. Here is what they have posted:

Blogs are up. However, we are displaying backup copies of weblogs from a few days ago, so some of your newest content may not be showing.

I am really curious: what kind of commercial service is it that doesn't maintain access to ghost backups, hourly backups, or at the very least, daily backups? Many of my favourite blogs are now showing only postings from a week ago or earlier.

So much for the "45 free days" ...

More Evidence that Sex Sells

2005-12-16T02:11:00.000-05:00

As if we needed any confirmation, look what happened to the hits on this blog after people started Googling and Yahooing and Whatevering "UWO student strip tease" and related topics, looking for the pictures and videos of the young woman at this university who performed for a roomful of young men:

To check the data over 30 days, click here. In his observation about a mid-day version of this graph, Phil Miller says,

Ever wonder why there are so many porn sites and why there are so few mostly-economics blogs? Me neither.
... It's a demand-side phenomenon!!!!

To tell the truth, I hadn't noticed ...

Residents' Choice: A threat to the President's Choice Brand?

2005-12-16T00:11:00.000-05:00

In Canada, the Weston food group, Loblaw's, Zehr's and other grocery chains carry an in-store brand of many items called "President's Choice"; on average, this brand is higher quality than most store brands or most no-name varieties of the products.

Recently, an acquaintance who wishes to remain anonymous, has proposed that a group of us send the following letter to Loblaw's (Most of the names have been changed to preserve anonymity):

President
Loblaw’s

Dear Sir:

I am a member of a quartet of business men—an economist, a physician, a pharmacist and a sociologist who are planning a new product. We have been advised by the son of one of our members (who started law school in September) that there is a possibility our new product will infringe on your copyright, trademarks and patents. And we wish to reassure you on our new product and secure your permission to go ahead.

We plan on producing a new series of food products under the name RESIDENTS' CHOICE.

Our exclusive line of food products is targeted at the residents of nursing homes who have special eating needs not satisfied by other products such as your own President’s Choice foods. For example, your President’s Choice Caesar Sourdough Croutons are difficult (or shall we say hard) to eat because of their crispiness and are loaded with spice and acids (such as fumaric acid and citric acid) whereas our RESIDENTS' CHOICE Croutons will be unbaked pieces of Wonder Bread without the crust, or flavors added, much softer and less irritating on the gums of 90-year old residents.

Our line of RESIDENTS' CHOICE foods were developed by experts who are concerned with the health and vigor of nursing home patients in mind.

The market was studied by an expert with a great deal of experience with foods, the economist Dr. John Palmer, who is famed for his work with butter substitutes, and developed a theory of Margarine Utility.

Dr. Hippo Crates has had much experience with older patients and his own mother is 109 years old. He has been much reputed and has commendations and references from the captains of several seaworthy student boats, and has had very few student deaths, or pregnancies of the girls whom he had close contact with under his ship patronage licence.

Our pharmacist, James Jones, will be testing each of our RESIDENTS' CHOICE foods with mortar and pestle analysis of stress tolerance, permeability, and component correlation analysis. His analysis of digoxin digestibility following ingestion of peanut butter is well-known as the Jones Jive analysis and can be found in a recent issue of the Drug Store Gazette.

Finally, as the sociologist looking at group dynamics and eating in inbound collectivities, Dr. Peter Headcase shall be in charge of compatibility analysis and relationships among the different RESIDENTS’ CHOICE FOODS. He is well known for his study of Feedback and Foodback. (You may recall the recent case of another new product company which attempted to secure permission from the Law Counsel of Coca-Cola for his Kiet Doke which sounds a lot like Diet Coke).

We shall look forward to your reaction to our plans and your blessings.

Sincerely,

Dietary Advice for Christmas

2005-12-15T15:23:00.000-05:00

These ten commandments were sent to me by Jack, a physician, so they must be correct:

The Christmas Ten Commandments

1. Avoid carrot sticks. Anyone who puts carrots on a holiday buffet table knows nothing of the Christmas spirit. In fact, if you see carrots, leave immediately. Go next door, where they're serving rum balls.

2. Drink as much eggnog as you can. And quickly. Like fine single-malt scotch, it's rare. In fact, it's even rarer than single-malt scotch. You can't find it any other time of year but now. So drink up! Who cares that it has 10,000 calories in every sip? It's not as if you're going to turn into an eggnog-aholic or something. It's a treat. Enjoy it. Have one for me. Have two. It's later than you think. It's Christmas!

3. If something comes with gravy, use it. That's the whole point of gravy. Gravy does not stand alone. Pour it on. Make a volcano out of your mashed potatoes. Fill it with gravy. Eat the volcano. Repeat.

4. As for mashed potatoes, always ask if they're made with skim milk or whole milk. If it's skim, pass. Why bother? It's like buying a sports car with an automatic transmission.

5. Do not have a snack before going to a party in an effort to control your eating. The whole point of going to a Christmas party is to eat other people's food for free. Lots of it. Hello?

6. Under no circumstances should you exercise between now and New Year's. You can do that in January when you have nothing else to do. This is the time for long naps, which you'll need after circling the buffet table while carrying a 10-pound plate of food and that vat of eggnog.

7. If you come across something really good at a buffet table, like frosted Christmas cookies in the shape and size of Santa, position yourself near them and don't budge. Have as many as you can before becoming the center of attention. They're like a beautiful pair of shoes. If you leave them behind, you're never going to see them again.

8. Same for pies. Apple. Pumpkin. Mincemeat. Have a slice of each. Or, if you don't like mincemeat, have two apples and one pumpkin. Always have three. When else do you get to have more than one dessert? Labour Day?

9. Did someone mention fruitcake? Granted, it's loaded with the mandatory celebratory calories, but avoid it at all cost. I mean, have some standards.

10. One final tip: If you don't feel terrible when you leave the party or get up from the table, you haven't been paying attention. Reread tips; start over, but hurry, January is just around the corner.

Remember this motto to live by: "Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways, chocolate in one hand, Orange Woody's in the other, body thoroughly used up, totally worn out and screaming "WOO HOO what a ride!"

Curious about Drug Interactions?Check Out This Site

2005-12-15T01:37:00.000-05:00

My favourite drug dealer, JB, has pointed me to this site, where one can check the interaction effects of various drugs. He cautions, though, that one must use internet information judiciously.

Yet Another Reason Not to Support the UN:Map Obliterates Israel

2005-12-15T00:33:00.000-05:00

The United Nations held a "Day of Solidarity with the Palestinian People" last week. A large map of “Palestine,” with Israel literally wiped off the map, featured prominently in the festivities.

Here is the full article that appeared last week.
Here is the map:

For more about why I seem so strongly pro-Israel, see what Mark Steyn has written [h/t to Jack]. Here is an excerpt:

So let's see: We have a Holocaust denier who wants to relocate an entire nation to another continent, and he happens to be head of the world's newest nuclear state.

(They're not 100 percent fully-fledged operational, but happily for them they can drag out the pseudo-negotiations with the European Union until they are. And Washington certainly won't do anything, because after all if we're not 100 percent certain they've got WMD -- which we won't be until there's a big smoking crater live on CNN one afternoon -- it would be just another Bushitlerburton lie to get us into another war for oil, right?)

So how does the United States react? Well, White House spokesman Scott McClellan said that the comments of Ahmadinejad "further underscore our concerns about the regime."

Really? But wait, the world's superpower wasn't done yet. The State Department moved to a two-adjective alert and described Ahmadinejad's remarks as "appalling" and "reprehensible." "They certainly don't inspire hope among any of us in the international community that the government of Iran is prepared to engage as a responsible member of that community," said spokesman Adam Ereli.

You don't say. Ahmadinejad was speaking in the holy city of Mecca, head office of the "religion of peace," during a meeting of the Organization of the Islamic Conference. There were fiftysomething other heads of government in town. How many do you think took their Iranian colleague to task?

Well, what's new? But, that being so, it would be heartening if the rest of the world could muster a serious response to the guy. How one pines for a plain-spoken tell-it-like-it-is fellow like, say, former U.N. Secretary-General Boutros Boutros-Ghali? As he memorably said of Iran, "It's a totalitarian regime." Oh, no, wait. He said that about the United States. On Iran, he's as impeccably circumspect and discreet as the State Department.

Toronto Not Prepared for Pandemic; and quarantine won't work

2005-12-14T01:34:00.000-05:00

If a Pandemic, such as Avian Flu, were to hit Toronto, the city's health professionals would not be able to deal with it very well, according to David McKeown, the city's medical officer of health [from National Post; Date: Nov 25, 2005; Section: Toronto; Page: 15 ($, no link available), h/t to Jack]:

A severe pandemic could render as many as 914,000 people sick, hospitalize 14,000 individuals and cause 4,300 deaths, according to Toronto Public Health.

If faced with this worst-case scenario, hospitals may be forced to reject some patients, either those suffering from the flu or those with other ailments. “In any emergency, whether it is a plane crash that sends a bunch of people to the emergency room or a city-wide pandemic, the health care system will set priorities and triage to make sure the most urgent health needs are attended to,” Dr. McKeown said.

An extreme outbreak would overwhelm not only hospitals, but also morgues. The city could be forced to store dead bodies in refrigerated trailers, said Barbara Yaffe, director of communicable disease control.

A second public health report released yesterday suggested quarantine measures cut disease transmission rates by about 50% during the SARS outbreak in 2003. However, because the incubation time for influenza is far shorter than for SARS, officials do not think quarantine would control a flu pandemic.

“Influenza is also very highly infectious and will likely be transmitted widely in the community before contacts could be identified and placed in quarantines,” Dr. Yaffe said.

The doctor added it is unclear whether wearing surgical masks would protect the public during an outbreak, saying that further study is needed. “There is currently no evidence available that the use of masks in public settings will be protective when the influenza virus is circulating widely,” Dr. Yaffe said. “However, we do know that individuals that wear a surgical mask properly at the time of exposure may benefit from the barrier provided.”

Jack's assessment:

Acknowledgement that short incubation period for H5N1 would likely render quarantine efforts ineffective and also that the emerging plan seems to be steering towards protection of 'key' personnel rather than saturating early invasion zones, as the WHO plan outlines. Inability of hospital system to handle even current load is admitted. Mormonize, I say. Those old nuclear bunkers of the 50's are going up in value ....

The Expected Marginal Benefits of Drinking: in moderation, can it help keep you slim?

2005-12-14T01:21:00.000-05:00

Can drinking help keep you slim? From the Daily Mail (h/t to BenS):

People who drink moderately every day are significantly less likely to become obese in later life than teetotallers, researchers found.

However, the image of the potbellied ten-pint-a-night man still holds true - those who indulge in binge or heavy drinking are 46 per cent more likely to become obese than those who don't touch a drop.

So, it is drinking in moderation (not to excess) that might be associated with a lower probability of obesity. And it is far from clear that there is a direct causal link.

If there is a causal link between drinking and weight control, though, it appears that the expected marginal benefit is positive for the first drink or so, but then turns negative.

In my own case, I know that the causal relationship does not work this way. Once I have even one drink, my inhibitions are greatly impaired, and I start eating any junk food I can get my hands on. But if there is nothing of interest in the house, I'm happy to run to the variety store (a half block away) in my bathrobe and slippers for some junk food.

Even in the winter.

UWO Student Stripper

2005-12-13T09:00:00.000-05:00

There have been many visits to this blog lately from people using Google and other search engines to try to find the video of a UWO student who performed a strip tease for some guys who lived in her residence hall.

I do not have the photos or the video.

You can probably find them by following some links at this site.
You might also find some of the discussion there of interest.

And for those who want to know, yes, I saw a few of the photos;
and, no, I do not recognize the student.
For those who would like to read more, here is some news coverage of the incident.

DARK MATTERS: Obscured thinking and shadowed language

2005-12-13T03:17:00.000-05:00

This conference is not quite so racy as the one held by the same group last year, but it looks just as interesting. Unfortunately, they do not have a web page, so here is their call for papers:

April 6-8, 2006
University of Western Ontario
London, Ontario

DARK MATTERS:
Obscured thinking and shadowed language

This interdisciplinary conference seeks to explore the notion of "darkness" in its various conceptualizations and codifications, both throughout history and in the present. We emphasize the idea of the dark as a terrain of constant negotiation, and as a concept with a plurality of meanings and implications. The conference seeks to elaborate upon these diverse perceptions of darkness, from the idea of the abyss in philosophy or astronomy to darkness in photography and other visual arts, from theology and psychoanalysis to literary metaphors and tropes, and other potential ways of constructing, thinking about, or representing darkness in the present.

Suggested Themes:

dark humour…underworlds & afterlives…the void…a little Night-music…St John of the Cross…

mestizaje… minority languages …metaphors of blindness…Lacan…chiaroscuro & the Baroque…behind the veil…camera obscura …Freud…film noir …rhetoric of the absolute…black holes … nihilism and nothingness...the dark side of language: euphemism & taboo …

the death drive & the unconscious…Prince of Darkness: political justice & ethics…the abyss …things that go bump in the night…Nietzsche…the shadow play…not-white magic …

a flash in the darkness: phenomenology & post-structuralism…Heart & Liver of Darkness…

the visible invisible…Jung…negative theology…forgetting…Deleuze …black box…creation/destruction…the vanishing point…Calderón’s prison…“ít was a dark and stormy night"

We invite proposals for 20-minute papers on literature, linguistics, literary theory, philosophy, theology, visual arts, music, cinema, science, etc.

Proposals in English, Spanish or French (250-500 words) should be accompanied by a short CV and address, and submitted by January 9, 2006.

Please send submissions to:

Graduate Student Conference
Department of Modern Languages and Literatures
Room 115, University College
University of Western Ontario
London, Ontario, Canada N6A 3K7
Tel: (519) 661-3196 – Fax: (519) 661-4093
Or e-mail to: Monica Rettig (mrettig@uwo.ca ) or Meredith Snyder (msnyder6@uwo.ca)

I'm going to submit 20 minutes worth of economics jokes. I expect these folks would view that as a great example of dark humour. Now that I think about it, these folks might view anything I write as an example of "Dark Matter."

Smorgasbords, Marginal Utility, Information, and Expectations

2005-12-13T00:56:00.000-05:00

From Wikipedia:

Smorgasbord is an anglification of the Swedish word Smörgåsbord. It is a buffet style table in a restaurant, or a holiday feast at home, prepared with many small dishes. For a fixed amount of money, you are allowed to eat as many of these as you wish.

Phil Miller has a link to an interesting variation on Smorgasbords — all you can drink for a fixed price:

About 200 undergraduates from the London School of Economics rampaged after an end-of-year fancy dress party, where they paid a flat £5 entry fee to drink as much as they liked for free between 11 am and 2 pm.

First blush economic analysis predicts that people will consume food, beer, whatever is offered at such an affair, up to the point at which the marginal utility is zero. And this analysis is correct so far as it goes. That's what most of us teach our intro students in economics when introduction the concept of marginal utility.

But there are some additional, important considerations that rational maximizers will tend to make:

The more I consume of one beverage or type of food, the less utility I will get from a different beverage or food (assuming that marginal utility drops off dramatically as stomach capacity is approached). As a result,
It might be better to view the problem as a constrained optimization with stomach capacity, drunken stupidness, or alcohol poisoning as the constraint. Is it the constraint that causes the reduction in utility?
The previous two points are short-run. But in most instances, the pleasure from eating is contemporaneous with the eating, but the pain of over-eating comes later. Similarly, the pleasure of drinking in these situations comes with the drunkenness, while the agony of the after-effects comes later. Depending on the consumer's rate of time-preference, and depending on one's expectations and information, the point at which one reaches an expected utility maximum varies from person to person.

With these considerations in mind, one can make some empirical predictions and observations.

Assume younger people have a higher rate of time preference, and/or
Assume some younger people have less experience and less information, thereby forming incorrect expectations about the expected utility from these activities.
That helps explain why we don't see drinking and eating binges in senior citizen communities.

In other words, we older folks quit earlier, in part, because when we look at the expected net present value of future utility, we have better information. Hence we know when to quit without the ensuing negative utility that results from over-indulging.

Well, most of the time we do....

Second Best Biz-Blog in Canada

2005-12-12T20:00:00.000-05:00

It was disappointing that EclectEcon was not voted the best biz-blog in Canada, but given that I never thought of it as a biz-blog, I guess second best out of the many that were nominated is pretty okay. Thanks to everyone who voted for this blog.

Cutting the GST: "Stupid, stupid, stupid, stupid"

2005-12-12T02:07:00.000-05:00

Shortly after Stephen Harper's proposal to reduce the GST, I wrote,

Stephen Harper seems to be drifting increasingly away from sensible economic policies. This drift is both disappointing at best.

His latest pronouncement is to promise to lower the GST from 7% to 5%. For those of you outside Canada, the GST is the Goods and Services Tax, something like a national sales tax or value-added tax. Lowering it would not be a great economic policy.

Many readers, especially at the Western Standard, disagreed with my position (see the comments there).

My colleague, Jim Davies, obviously agrees with these views [In the interest of accuracy, I learned most of this material from him, so it is probably better to say that I agree with his views]. Here's is an excerpt of his comments made for the CBC [h/t to Worthwhile Canadian Initiative].

"Most serious work done by economists who specialize in public finance indicates that the GST is a more efficient tax source than the income tax," Davies told the Canadian Press. "If the income tax cut is designed properly, it can provide similar benefit to lower-income taxpayers."

"Stupid, stupid, stupid, stupid," he said.

The same CBC piece quotes Bill Robson at CDHowe as sharing these views:

"If you want tax cuts that are going to promote work, going to promote saving, help us invest more and raise living standards in the future, the GST is not the tax you would go after."

Robson said it would be better to cut personal income taxes.

If we want to reform the GST, let's get rid of the exemptions and broaden its base.

"The Big Lie"

2005-12-12T01:32:00.000-05:00

I often pride myself on being rationally ignorant about many things: given what I already know, and given my priors and expectations, I'm often unwilling to look into matters when someone tells me something. What are the expected benefits of doing so? Usually they are much less than the expected costs, so I let it go.

Within this framework, it is easy to understand why "The Big Lie" works as a strategy for despotic control. The ruler's subjects are told some horrid lies. And the costs of checking them out are made very high (the threat of pain and torture does that). After awhile, the subjects hear the same big lies often enough that they find it easier to believe the lies than challenge them. It is frightening.

Now read this [h/t to JC].

Commonplace in Islamic media and intellectual circles are accusations that Jews concocted the Holocaust, they control the media, they are Nazis, they inject HIV into Muslim children, they drink the blood of Muslim children, and of course that they are taking over the world, according to the Anti-Defamation League and as displayed across the pages of prominent Islamic newspapers.

The result is that Islamic leaders and media are systematically indoctrinating their people to believe all the ills of the Muslim world are the fault of someone else.

When such audacious statements and beliefs are brought to the attention of those in the West, the tendency is to brush them aside as ridiculous but ultimately harmless. We often subscribe to the "let them believe what they want to believe" mentality.

This is a dangerous fallacy. History has shown time and again that such beliefs are not harmless.

We must recognize that when the "Big Lie" is left unchallenged - as it was in 1930s Germany - humanity pays a heavy toll.

Avian Flu: the impact on the chicken market

2005-12-11T16:39:00.000-05:00

If Avian Flu continues to creep forward as a threat to human health, once it becomes a full-blown pandemic [see Tyler Cowen's latest posting on this topic], the ominivores among us will probably have to cut way back on the chicken we eat. The reason, though, will not be because of fear of transmission from the meat to humans. Rather, the reason will be that working with chickens will become increasingly risky.

Imagine being one of a team of 12 people who go into a chicken barn at midnight to catch 22,000 chickens in 4 hours so they can be shipped off to the processor. Chicken catchers are in constant contact with chickens. They get scratched, and despite wearing masks (which most do not do in our area), they breath a lot of pollutant material.

As the risk of contracting Avian Flu grows, people will be more reluctant to become chicken catchers. And those who do will insist on being compensated both for the increased risk and for the increased costs of wearing additional protection. These increased costs will greatly reduce the supply of chicken meat. They will also dramatically reduce the value of chicken production quota in jurisdictions like Ontario that practice supply management.

If I were a chicken farmer, I would be tempted to sell the farm and quota; I do not think the market has fully capitalized or adjusted to this risk.

Tim Harford Challenges Perfect Complementarity

2005-12-11T03:44:00.000-05:00

The two socks of a pair are perfect complements, right?

Not if you buy two dozen pairs of identical socks.

See Dear Economist.

Law and Order

2005-12-11T01:17:00.000-05:00

There is no single thing that has disturbed my sleep pattern more than the television series, "Law and Order". Once they started showing re-runs at 11pm (Eastern time) on A&E and then switched to showing the re-runs at 11pm on Bravo, I have had trouble getting to bed at a decent hour.

The series, and its offshoots, have been captivating. As one of my friends wrote to me a number of years ago, "oops, gotta stop writing. L&O is about to start."

I have noticed lately, though, that I am less interested in the show. It's not just that I'm losing interest in the re-runs; I don't like the new episodes so much either.

Rebekah, at Composite Drawlings, explains why the shows have gone off her list, and I expect these reasons go a long way toward explaining why I have lost interest, too. Be sure to read her entire piece, but here's a short excerpt:

These pitchmen who have been writing the series — all three of the shows for that matter — seem to think that it's okay to vilify an entire religious group, and, for that matter, the majority of the country. Teaching a child right from wrong obviously must come into conflict with teaching a child about truth and love and all that warm fuzzy moral relativistic stuff, right? Oh, and the fundamentalists who kill and maim are never Muslims or atheists or anybody else, are they (except in the case where they're victimized into some unsavory act)? No matter what the crime, it's always white-bread Christians at fault, as far as these guys are concerned.

That wasn't the case when Moriarity played the assistant DA.

Pennies, Coins, Dirhams, and Fils

2005-12-11T01:06:00.000-05:00

I have long argued that Canada (and the U.S.) should stop minting pennies and stop using them (for example, see here and here). My argument has been

Pennies don't buy anything any more.
The transaction costs of using pennies are seriously non-negligible.
When transportation and other costs are included, minting pennies generates negative seigniorage.

Imagine if the smallest-valued coin had the purchasing power of only one-quarter of a U.S. penny. In such an economy, one can readily imagine that people would just stop using the coin. And that is pretty much what has happened in the United Arab Republic [h/t to the Emirates Economist]

Despite Central Bank of UAE figures saying that 1, 5, 10 fils coins are in mass circulation, residents and shopkeepers say they rarely see them.

“The Central Bank has not withdrawn from circulation any of these denominations and continues to issue them according to the needs of banks in the amounts they require on a weekly basis,” Rashed Al Fandi, UAE Central Bank’s executive director for banking operations, told Emirates Today.

“The large quantities of these denominations in circulation shows their availability in the market.” The Central Bank maintains that there is a demand for small fils coins and that the denominations are in circulation in significant quantities.

But if you buy vegetables and fruits in Dubai, you are likely to end up with a bill that totals 95, 48 or even 60 fils. Stores round off the bill, often in favour of the customers.

“We round it off to the nearest 50 fils or one dirham,” says Zorayda Esquerra of Carrefour, Bur Dubai. [1 Dh = 100 fils]

Plus de change .... The Canadian Mint says the same thing:

Banks want the pennies, so we mint them.

They take the orders from the chartered banks as a sign of demand, a sign that people actually want these small, useless coins. But that is just plain silly.

Look at the markets: people do not want these small coins. In Canada, people take and leave pennies in the penny cups at cash registers. In New Zealand and Australia, virtually everyone is happy to be rid of their one-cent and two-cent coins.

In the United Arab Emirates, people round to the nearest 50 Fils. And they do this not because the smaller coins are unavailable; they do it because they are a nuisance.

The solution is to declare legally that pennies (in North America) and small-denomination coins in the UAE are no longer legal tender but must be accepted for deposit by financial institutions.

Women's Curling Finals on CBCgroan

2005-12-10T13:07:00.000-05:00

The weekend draws of the Canadian Olympic Curling Trials are being shown on CBC. I must say, aside from the team of Adamson and Palmer, I really prefer the TSN broadcast team to any other curling broadcasters.

[aside: I've been told that Scott Russell was once a student of mine.]

For live-blogging of the event, see this blog.

Sudoku Math and Strategies

2005-12-10T03:04:00.000-05:00

For those of you who are still addicted to Sudoku, here are explanations of two strategies for solving them (courtesy of CMT):

The X-Wing:

X-Wings are fairly easy to spot, but a little harder to understand than some other techniques. Like others it relies on using positions of pencilmarks to infer enough to allow you to eliminate some other candidates.

X-Wings are when there are two lines, each having the same two positions for a number.

The Swordfish:

This is very similar to using X-Wings, in that it will allow you to use knowledge about rows to remove candidates from columns, and vice versa. Make sure you're happy with why X-Wings work before moving on to Swordfish!
The complexity here is that you're using knowledge from 3 rows at the same time - and that's what makes them harder to spot. Unlike X-Wings, they don't form a simple rectangle.

If you're really intrigued by the mathematics (and a bit of history) behind Sudoku, check out this article [h/t to Tyler Cowen]:

From a computational point of view, Sudoku is a constraint-satisfaction problem. The constraints are the rules forbidding two cells in the same neighborhood to have the same value; a solution is an assignment of values to cells that satisfies all the constraints simultaneously.

Best Use Ever Made of a Citroen 2CV

2005-12-10T00:55:00.000-05:00

Watch this video [thanks to Kent for the pointer].

I want to see them try this with a Hummer.

Best Biz Blog in Canada -- VOTE TODAY!!

2005-12-09T22:01:00.000-05:00

EclectEcon made it through the first round of balloting and is still in the running! Please go to this site and vote for The Eclectic Econoclast (the former name of this blog).

Today is the last day to vote!

More Pessimism about Tamiflu & Avian Flu:Theoretical Effectiveness vs. Use Effectiveness

2005-12-09T02:34:00.000-05:00

I wrote a couple of days ago about the likely difficulty of using Tamiflu effectively to help fight Avian Flu. Here is more from my friend:

This distinction [between theoretical and use effectiveness] is often employed in discussion of contraceptive use, and should be applied to proposed H5N1 medications as well.

Just as condoms are far less effective in the bedroom (or stairwell) as they are in mathematical models, one might expect a similar discrepancy between ideal use of Tamiflu, and what is likely to happen in the community.

For usually non lethal Influenza A (your annual scourge) the importance of starting, for non immunized folks, antiviral medication within the first 48 hrs has been well publicized. Such a restriction has limited the effectiveness of antivirals. Recognition of illness, delay in getting to a physician - almost impossible in some settings within 48 hrs except through emergency or drop-in clinics - and a further delay in acquiring the medication, all conspire against effective early use.

Bird flu H5N1 promises to make effective use of available antiviral medication even tougher, given the shorter incubation period, and earlier arrival time of peak viral load. If we add to this dilemma the proposal of central control of medication and all the logistical snafus inevitably attached.........

Then we get to problems in applying the medication. How much, how long, and compliance given known side effects.

The optimistic among us will think of this as a challenge.

Merck and Vioxx: The Market Works...... if we have good information

2005-12-08T21:55:00.000-05:00

One of the reasons we have laws against fraud and misleading advertising is that if consumers cannot trust the information provided to them, they will devote too many scarce resources to divining and confirming information in the marketplace. This basic economic principle lies at the heart of the US civil suit against Merck and Vioxx [h/t to BenS]:

Authors of a study funded by Vioxx maker Merck & Co. failed to disclose in a report published in the New England Journal of Medicine in 2000 that three additional patients in a clinical study suffered heart attacks while using the now-withdrawn painkiller, the journal wrote in an editorial released Thursday.

The editorial, written by the journal's editor in chief, Dr. Jeffrey M. Drazen, executive editor Dr. Gregory D. Curfman and managing editor Stephen Morrissey, also alleges the study's authors deleted other relevant data before submitting their article for publication.

"Taken together, these inaccuracies and deletions call into question the integrity of the data on adverse cardiovascular events in this article," the doctors wrote. Excluding the three heart attacks "made certain calculations and conclusions in the article incorrect."

Are All Suicide Bombers So Young?Are All Martyrs Young?

2005-12-08T02:21:00.000-05:00

I have been struck by the age of suicide bombers; they all seem so comparatively young. I do not recall having seen any stories of 65-or-70-year-old suicide bombers (or martyrs to other causes, for that matter). I expect the comments will soon be replete with counter examples, but certainly in a general sense my observation is typical. Why is that?

It seems terribly wasteful for young people to give their lives for a cause, even if you agree with the cause. Surely it would be a much better use of a society's scarce resources if its suicide bombers, martyrs, and even some soldiers, were its senior citizens, who are more likely to be a drain on the economy in the near future if they aren't already.

My colleague, Ron Wintrobe, has a paper forthcoming in Public Choice and a book forthcoming from Cambridge University Press on the economic rationality of extremism. His argument, basically, is that suicide bombers rationally choose this role because they get immense utility from the sense of membership and belonging that comes with being a suicide bomber.

His work is compelling. And it helps explain why we do not see senior-citizen martyrs. It seems that a sense of belonging is much more important to young adults than it is to senior citizens.

But is that always the case? Have there been absolutely no cases of senior-citizen suicide bombers or martyrs for any cause? I find it difficult to believe, difficult to imagine, and difficult to accept that there isn't a sufficiently high variance of personalities that not even one senior citizen has been used as a suicide bomber.

Further, I find it implausible that are not at least some senior citizens who, expecting that their heirs would receive handsome bounties, would be willing to become suicide bombers. Is it just that the thought of 72 virgins in heaven means so little to old guys or is it something else? What am I missing?

Bribes from Aussie Wheat Board Funded Suicide Bombers

2005-12-08T01:45:00.000-05:00

From The Australian:

KICKBACKS paid by Australia's monopoly wheat exporter to the regime of Saddam Hussein were put into a bank account used to finance a $US10million ($13 million) slush fund for families of Palestinian suicide bombers.

US Government and CIA documents reveal a trail of blood money flowing from companies now known to have taken bribes into bank accounts in Jordan, which were then used by the Iraqi Government to pay money for deadly bombings or to buy weapons.

According to a US inquiry into the corrupt UN oil-for-food program, companies such as Jordanian firm Alia, which received hundreds of millions of dollars from Australian wheat exporter AWB, paid money into "front" accounts held under false names.

These accounts were then emptied each evening into Iraqi Government accounts at the same bank and used for its international transactions.

... AWB, the former Australian Wheat Board, has been accused of paying $US222 million in illegal bribes to the Iraqi Government through the corrupt program. Its payments represented the biggest single contribution to an estimated $1.5 billion in kickbacks uncovered in an investigation by Paul Volcker.

... AWB admits making the payments to Alia but insists it thought the fees were for transporting wheat around Iraq and did not know it was a front company for Saddam's regime.

the Ant and the Grasshopper(Canadian style)

2005-12-07T00:57:00.000-05:00

BenS sent this story. I have seen it before in other renditions, but this one bears repeating. It is from the Nov. 28th edition of Chron Watch (h/t to JP, but I am unable to find the precise link):

CLASSIC VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The shivering grasshopper has no food or shelter, so he dies out in the cold.
THE END
THE CANADIAN VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. So far, so good, eh? The shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others less fortunate, like him, are cold and starving. The CBC shows up to provide live coverage of the shivering grasshopper, with cuts to a video of the ant in his comfortable warm home with a table laden with food. Canadians are stunned that in a country of such wealth, this poor grasshopper is allowed to suffer so while others have plenty.

The NDP, the CAW and the Coalition Against Poverty demonstrate in front of the ant's house. The CBC, interrupting an Inuit cultural festival special from Nunavut with breaking news, broadcasts them singing "We Shall Overcome." Sven Robinson rants in an interview with Pamela Wallin that the ant has gotten rich off the backs of grasshoppers, and calls for an immediate tax hike on the ant to make him pay his "fair share."

In response to polls, the Liberal Government drafts the Economic Equity and Grasshopper Anti-Discrimination Act, retroactive to the beginning of the summer. The ant's taxes are reassessed, and he is also fined for failing to hire grasshoppers as helpers. Without enough money to pay both the fine and his newly imposed retroactive taxes, his home is confiscated by the government.

The ant moves to the United States, and starts a successful agribiz company. The CBC later shows the now fat grasshopper finishing up the last of the ant's food, though spring is still months away, while the government house he is in, which just happens to be the ant's old house, crumbles around him because he hasn't bothered to maintain it.

Inadequate government funding is blamed, Roy Romanow is appointed to head a commission of inquiry that will cost $10,000,000. The grasshopper is soon dead of a drug overdose, the Toronto Star blames it on the obvious failure of government to address the root causes of despair arising from social inequity.
THE END

Is Homeopathy Just an Expensive Placebo? or maybe an inexpensive placebo?

2005-12-07T00:26:00.000-05:00

Quite possibly homeopathy is no more effective for many complaints than a placebo. From Lancet, courtesy of J:

Biases are present in placebo-controlled trials of both homoeopathy and conventional medicine. When account was taken for these biases in the analysis, there was weak evidence for a specific effect of homoeopathic remedies, but strong evidence for specific effects of conventional interventions. This finding is compatible with the notion that the clinical effects of homoeopathy are placebo effects.

I realize that traditional physician/practitioners have a strong incentive to find that homeopathy is no (or not much) more effective than a placebo, but suppose they're right.... Suppose homeopathy is just a different form of placebo.

If that is the case, which is more efficient? Expensive placebo-like drugs or homeopathy?

Reminds me of the time BenS and I were in a large, discount drug store, and he asked the pharmacist, very loudly, "Where is your selection of placebos?"

The Winter of Our Discontent?

2005-12-06T02:59:00.000-05:00

Salim Mansur, writing in the Toronto Sun, waxes Shakespearean:

As the long federal campaign unfolds, it might well become Canada's political winter of discontent.

But at some point during this period it will be worthwhile if Canadians reflect on the price people have paid for democracy — and how it is not to be taken for granted.

... Securing freedom and imposing democracies on Germany and Japan after World War II ... required a coalition of willing allies united by their commitment to democracy, and Canadians of that generation carried their responsibility with pride and devotion of a free people.

Canadians, in their winter of discontent, will likely remain preoccupied with domestic quarrels and wishes, however insignificant these are in the larger context of a world where evil is perpetrated by men — as in Darfur — and peril looms as Iran seeks to acquire nuclear capability.

The story of Iraq is a reminder that some people somewhere paid the price for those in democracy to enjoy freedom to choose how they will live and who will govern them.

It's a valuable reminder.

Asian Flu:How Effect Will Tamiflu Be? (not very)

2005-12-06T01:36:00.000-05:00

Some people are hoping that tamiflu will help halt Asian Flu as/if it starts sweeping across the globe. Do not be optimistic. My friend who is a semi-retired physician has written:

As you know, the only dimly lit corner of the room for efficacy of Tamiflu to save lives in a pandemic comes from the mouse study. In that study, up to 80% of the infected mice survived, if given eight days of treatment instead of the usual five. Only 50% of the latter group survived (or, you may prefer to say, fully half of the mice in this group survived). Those who have taken heart from this study have largely chosen to ignore the fact that the mice were given Tamiflu BEFORE being infected - a difficult act to follow for people in a pandemic. Now it seems there is WORSE news: while the suggestion was that higher than currently recommended doses would be more efficacious , an astute reader has uncovered the fact that the mice on the highest study dose were, in fact, given FIVE TIMES the currently recommended dose. The real expected mortality rate taking the recommended dose, even while starting before infection, would be quite abysmal, if results were directly transferable to humans.

The actual study, which I haven't been able to get yet, is:

Reference: H. Yen et al. Virulence may determine the necessary
duration and dosage of oseltamivir treatment for highly pathogenic
A/Vietnam/1203/04 (H5N1) influenza virus in mice.
Journal of Infectious Diseases DOI:10.1086/432008 (2005).

Here is the thread on the dosage bombshell:

Re:Mouse Studies of Oseltamivir Show Promise Against H5N1 Influenza Virus
« Reply #20 on: August 08, 2005, 04:31:26 am »

Quote from: hydra on August 07, 2005, 11:36:31 pm

Either I am crazy or the NIH is making a mistake. The highest dose used in this study is 10mg/kg/day. For a 75kg human male, that would mean taking 750mg/day of oseltamivir.

Now, I have a box of tamiflu sitting right in front of me. There are 10 capsules, each capsule contains 75mg, and the dosing instructions are take 1 capsule twice a day. The total dose per day is therefore 150/mg/day, NOT 750mg/day.

Therefore, this statement in the NIH article above "The highest dosage level, adjusted for weight, was equivalent to the dose currently recommended for humans sick with the flu. "
is wrong.

In fact, the recommended dose of human 2 capsules a day is about 2mg/kg/day, or about 1/5 the highest dose in this study.

Please correct me if I'm wrong.

For more on Avian Flu, along with many up-to-date items and links, be sure to bookmark this blog.

What Is It About Capital-Labour Substitution that Aussies Don't Understand?

2005-12-05T21:45:00.000-05:00

Tyler Cowen links to a story about restrictions at the Sydney Opera House.

Under a new interpretation of WorkCover rules, players in the Australian Opera and Ballet Orchestra can't be exposed to sound levels higher than 85 decibels averaged over a day.

This will have implications for orchestral music generally, but its immediate impact is being felt on, of all things, the Australian Ballet's Sleeping Beauty. To avoid any one musician being exposed to excessive sound, the orchestra is working with relay teams of extra musicians: four separate horn sections, four of clarinets, four of flutes, and so on. The orchestra that begins a particular performance isn't necessarily the same one that finishes it.

It's a logistical nightmare and an expensive one, adding $100,000 to the ballet's production costs.

Surely a less costly way of dealing with the situation is to provide the players with partial-sound-deadening earplugs. They are inexpensive and effective.

But as a horn player, I love to see the increase in demand for horn players. If it keeps up, I might even turn semi-pro...

Christmas Music

2005-12-05T12:03:00.000-05:00

I love traditional Christmas music. In fact, last April, I looked through the WinAmp offerings to see if there was any Christmas music available via internet radio in the spring. Alas, there wasn't.

I have to admit that makes sense. Surely the demand curve lies below the AVC curve for any potential producer. Put another way, the incremental costs of running a Christmas music internet radio station in April outweight any potential benefits, even if that station could capture the entire demand.

Actually, as recently as a month ago, there was no Christmas music available via internet radio. And two weeks ago, there were only two offerings.

As I write this, there are still only ten internet radio stations devoted to Christmas music. And searching through these ten has confirmed for me that I do not much like junky modern Christmas songs; I will not dignify them by calling them carols.

At the same time, our digital cable service now offers at least two different channels of Christmas carols, one of which is almost exclusively instrumental versions traditional carols. I love this channel. It makes for great background muzak.

In the past, I used to set up my 25-disk CD player about this time of the year to play all my Christmas music CDs. Now we just listen to cable.

Stephen Harper, the Tories, and the GST; Perhaps It Is Time for a Revival of the Reform Party

2005-12-05T02:04:00.000-05:00

Stephen Harper seems to be drifting increasingly away from sensible economic policies. This drift is both disappointing at best.

His latest pronouncement is to promise to lower the GST from 7% to 5%. For those of you outside Canada, the GST is the Goods and Services Tax, something like a national sales tax or value-added tax. Lowering it would not be a great economic policy.

Keep in mind that the GST was implemented to replace the hidden and onerous manufacturers' excise tax (see here for details). As Alan Adamson points out in that link, after-tax prices, for the most part, declined after the implementation of the GST.
The GST provides a disincentive for spending. To the extent that this effect leads to increased saving and investment, the GST and other value-added taxes promote future economic growth. Promoting long-term economic growth is probably the best way to fight poverty, reduce future problems of providing support for senior citizens, and improve overall standards of living.
Reportedly, Harper said one reason to reduce the GST is to stimulate consumption spending. Why is that such a terrific goal? As I noted above, we should be stimulating more saving, not consumption spending. Furthermore, we do NOT need any more stimulus to aggregate demand in Canada. The unemployment rate is at a 30-year low, and, if anything, we are on the verge of additional unwanted inflation. We certainly do not need to stimulate additional consumption spending.
A better way to reduce taxes and promote economic growth would be to cut the high-end marginal rates of income taxation. As Andrew Coyne says ($, h/t to Jack),
It may seem that I am being too hard on Mr. Harper. After all, while the Liberals have suddenly discovered the virtues of cutting income taxes in theory, they aren’t promising to do much of it in practice: The recent economic update talked about a one percentage point cut in the two middle rates, five years from now. And when any party talks about income tax cuts, they mean exclusively tax cuts for the middle class.

The justification, political or moral, is that a cut in the top rate would just benefit “the rich.” News flash: “The rich” profit just as much from cuts in the middle rates, or increases in the basic exemption, as their intended beneficiaries. Moreover, it’s pure windfall gain: The income on which they pay less tax is income they would have earned anyway.

As long as we’re giving away money to the rich, we might as well make them earn it. That means cuts in the rate of tax on new investments, on the next dollar earned, not on investments they’ve already made. That means cutting the top marginal rate.
Once upon a time, there was a party that understood this. Once upon a time, there was a leader who would have said this. As of now, that can no longer be said.

One reason many of us like having the GST be added on to sales, rather than be invisible (as the VAT is in Australia and many other places) is that it is a constant reminder that the gubmnt is taking money from consumers. Perhaps people don't like that reminder every time they buy something. Myself? I hate the bother of remembering and calculating the GST, so I'd prefer it was added into the posted prices. But I understand the reasons for keeping it visible - it keeps people aware of the large amount the gubmnt is taking from households.

UPDATE: Rick Hiebert points out in a comment at the Western Standard that the Reform Party also opposed the GST. Too bad.

Professors Respond to Incentives; and so do students

2005-12-05T00:22:00.000-05:00

The C.D. Howe Institute recently published a study that shows professors are more productive at universities that have merit-based salaries. Also, students at those universities seem to perform better. [thanks to Erin Airton for the pointer].

Let's suppose that the objective function of the university has nothing to do with education, research, or any of that airy-fairy stuff that university leaders talk about. Suppose, instead, that the objective function is to maximize the wealth of the university, including the expected net present value of future donations and future grants, etc., and future funding provided by various levels of gubmnt. With this objective function in mind, what matters is not quality of education or research, but perceptions of quality of education and research. As Ms. Eclectic says so cynically, "It's a business."

E.g. if a university can attract tonnes of really REALLY smart, innovative, creative, assertive, energetic students, then, even if the value added by the university is not worth a pinch of anything, it will appear that the university has done a great job. Further, its alumni, potential donors, and the politicians providing support for the university will tend to think the place is terrific.

With this view in mind, it is reasonable to be concerned about a simultaneity bias in the CD Howe study. What if good professors and good students tend to select schools that have merit pay for their professors? Then the existence of merit pay would have an incentive effect quite different from "merit pay encourages professors to do a better job."

And what if mediocre students select schools rated less highly. Then it might be a mistake to attribute causation to the CD Howe study results. Fortunately, the authors recognize this:

The salary structures at Canadian universities appear to matter. Evidence shows that the performance of universities with merit salaries exceeds that of other universities. They perform better in a variety of research-based and student quality measures without any sacrifice in other dimensions, such as student satisfaction. While such associations by themselves do not necessarily imply causation, the findings conform to the predicted consequences of different salary arrangements.

My Christmas Card

2005-12-04T05:54:00.000-05:00

Nobody objected to it last year. So here it is again.

It has been an annual card for my friends for the past twenty or so years.

Click here to see it.

[coarse language warning]

Balloon-Car Racing

2005-12-04T00:30:00.000-05:00

As we were doing yesterday's crossword puzzle, Ms. Eclectic and I came across a word neither of us knew (but I expect Kent would): nacelle. Our search for information about the word led me to something I found much more fascinating than cowls of jet engines.

Balloon-car racing. Build a car, attach a balloon, blow up the balloon, let the car go, and see whose goes the farthest. The outcome depends on the engineering of the car, the blowing up of the balloon, and considerable luck.

Here are some photos of balloon racers.

Another Reason to Dislike the Green Party

2005-12-03T09:55:00.000-05:00

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

2005-12-03T09:54:00.000-05:00

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.

Harper Takes Tories in Wrong Direction

2005-12-02T04:57:00.000-05:00

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.

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).
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).
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

2005-12-02T02:43:00.000-05:00

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.

EclectEcon

2005-12-01T20:35:00.000-05:00

The Final(?) Name for this blog is

EclectEcon

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

2005-12-01T09:11:00.000-05:00

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:

Too much caffeine can reduce your productivity and be harmful. I.e., eventually the marginal physical product of caffeine becomes negative.
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?

2005-12-01T00:03:00.000-05:00

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.

Best Biz Blog in Canada!!

2005-11-30T21:30:00.000-05:00

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:

http://cba.myblahg.com/

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

Thank you.

Worthwhile Canadian Initiative

2005-11-30T02:19:00.000-05:00

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

2005-11-30T00:55:00.000-05:00

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!]

Speed Bumps and Slides

2005-11-29T12:44:00.000-05:00

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

2005-11-29T09:18:00.000-05:00

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.

More on More BBC Bias

2005-11-28T19:18:00.000-05:00

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.

Political Economy Compass

2005-11-27T18:33:00.000-05:00

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.

Gasoline Pricing Puzzle

2005-11-26T13:41:00.000-05:00

For the past two weeks, Mac' Milk, a variety store in our town (with hi-tech gas pumps) has been selling gasoline for about 7 cents/litre less than the other stations in town. The price at this station has been about 10 cents/litre below that of gas stations in other towns within a fifteen minute to half-hour drive from here.

Why?

They always had cars at their pumps. There were sometimes short line-ups (which grew longer when pay-at-the-pump wasn't working). There were also stories that one of the other gas station proprietors in town called the manageress of this station to encourage them to raise their price [which, most likely, would be illegal, especially if successful].

When I asked someone in town why they persisted in charging such a low price, they said,

The woman said the company told her to keep the price low. They want to increase the gallonage.

Does that make sense? Why would senior managers of a major variety store chain (Mac's Milk) want to increase its "gallonage" of gasoline at one particular outlet? And why didn't the other gasoline stations in town follow their low price? And why did people fill up at the other stations at all?

Whatever the reason, I kept the top half of the tank full while this odd pricing strategy was occuring.

100 Notable Books of the Year

2005-11-25T00:48:00.000-05:00

Here is the list from the NYTimes (reg. req'd) that will be published next month. At that site, there are links to reviews. Here are some brief notes and questions:

I have actually heard of one or two of these books.
Is it incestuous for them to list so many books by NYTimes op-ed writers?
How many of them do you think this man has read? My guess is about 35.
Are there any Canadian writers on the list?

The Benefits of Melatonin

2005-11-24T02:23:00.000-05:00

Melatonin is hormone normally created by the body while you are asleep. I strongly recommend that you read the Wikipedia write-up about it.

Ms. Eclectic swears it helps with insomnia. So does JA who wrote to me:

I have been using it for years.
Melatonin level decline is a major issue with age, hence sleep problems for so many older folks.
1mg tablet is more than sufficient (that's many times 'natural ' output).
Problems include:
You never know what you are buying; early product was from pineal gland of animals. Now we are told it's almost all synthetic. Assays of product out there would, like many nutraceuticals , reveal a wide range of substances and potencies I'm sure. I use Puritan Pride's 1mg tablet (must import but cheap)- find it works best for me, whatever it is.
Slow onset of action - some physiologists claim it's not a 'hypnotic' (sleep inducer) at all but just sets your sleep 'clock'. I disagree from personal experience, even if that effect is placebo ;-).
It's a complex hormone and we don't know nearly enough about its other actions to know if they are good (Cancer prevention??? as article suggested) or bad stuff.
Nevertheless, I'm still alive - sort of - after more than a decade of use.

This seems like an efficient health supplement. JA's message to me was in response to this article that I sent to several friends who suffer from sleep disorders of varying degrees.

...the first clues that otherwise healthy people who do not get enough sleep or who shift their sleep schedules because of work, family or lifestyle may be endangering their health emerged from large epidemiological studies that found people who slept the least appeared to be significantly more likely to die.

"The strongest evidence out there right now is for the risk of overall mortality, but we also see the association for a number of specific causes," said Sanjay R. Patel of Harvard Medical School, who led one of the studies, involving more than 82,000 nurses, that found an increased risk of death among those who slept less than six hours a night.

As a result of these recommendations, I've started taking melatonin...... when I remember to take it........ along with scotch or red wine...... etc.

Wal-Mart and the Minimum Wage

2005-11-24T01:04:00.000-05:00

There has been considerable discussion in the blogosphere of Wal-Mart's call for an increase in the minimum wage (e.g., see here and here). For a very cogent discussion of Wal-Mart's advocating an increase in the minimum wage, see this piece by T.J. Brooks:

Wal-Mart and the early 20th century progressives are not the only ones to try to use minimum wage laws to achieve their own ends. Unions and organized labor are also often at the forefront in support of raising the minimum wage.
Surely their motives are beyond recourse? The Neumark paper suggests that this is not the case. As it turns out, minimum wage laws raise the earnings of relatively low-wage union members at the expense of the earnings of the lowest-wage nonunion workers. Firms that face the higher labor costs are forced to fire some people, which tend to be the nonunion employees, allowing the union employees to step in and take on some of the extra work.
Now let me be very clear. I do not think our local progressives or our city council had the same nefarious motives the others have had. I really believe they want to help the working poor. But I also believe that a higher minimum wage will not achieve that goal. Economic theory, empirical evidence and nearly 100 years of history are on my side.

The purported rebuttal to T. J. Brook's piece was a boring and typical exercise in irrelevant, non-sequitured Bush-bashing coupled with a call for a higher social safety net without regard for the changes in incentives that would result.

Small Talk and the Economics of Signaling

2005-11-23T01:09:00.000-05:00

Craig Newmark recently linked to this article [make sure you bookmark his blog, if you have not already done so!]. Even though it is more than a year old, the article has timeless advice, which I promptly sent to my offspring. As I said to them, when I follow this advice, things are good; when I don't, they aren't. Here, in this excerpt, is the pith of the piece:

The ability to connect in short, casual conversations can make or break careers, friendships and romances -- it's how we gather information and, hopefully, make a favorable impression. If you don't believe me, there are thousands of consultants, authors and communication coaches who will (for a fee) share their wisdom and tips for breaking the ice, working a room and taking over the world, one convention chitchat at a time.

Pay no attention to the experts behind the curtain. They'll have you practicing opening lines in your mirror, which will make you look stiff and silly in front of a real person. There are only three golden rules for small talk:

1. Shut up and listen.
2. When in doubt, repeat Rule 1.
3. People, even the really shy ones, like to talk about themselves and will do so if you know how to draw them out. You have to be genuinely interested. You have to check your ego. If this is done right, they walk away thinking you're great.

Small talk sends signals to and from people, but signals are just probablistic estimates about complex characteristics, about which it is costly to collect information. It is sometimes/often worth the effort to think about the signals one sends: the incremental expected benefits of doing so will usually outweigh the expected incremental costs of doing so.

Top Ten Over-Used Business Expressions

2005-11-22T01:08:00.000-05:00

From Chicago Business On-Line [explanatory comments in the original]:

10. Bandwidth
9. Spinning our wheels
8. Let's not re-invent the wheel
7. Team-member
6. Pro-active
5. Work-life balance
4. Let's compare apples to apples, not apples to oranges.
3. Self-starter
2. Let's hit the ground running.
1. Value-added

I would add "systemic" and "go-getter" to the list.
For more on biz-jargon, see this (courtesy of Craig Newmark)

The Market for Strippers:How Can There Be a Shortage?

2005-11-21T00:21:00.000-05:00

The headline to a recent article in the Edmonton Sun screams "Stripper Shortage" [h/t to JBC].

Wait a minute. When I teach the economics of shortages [or excess quantity demanded over the quantity supplied (not excess demand!)], I tell my students that they must refer to a shortage at a specific price (usually the current price). There is never a shortage if market prices are allowed to adjust freely to shifts in the supply and demand curves.

This article never mentions the price, though it is clear that wage rates underlie much of the economics of the story.

Canada's welcome mat is still rolled out for foreign strippers and lap dancers who can get quick visas to fill a domestic "labour shortage."

Last December, the Liberal government announced it was cancelling a controversial program that allowed exotic dancers to gain temporary work permits based on a national labour market opinion.

But it was quietly replaced by a process that permits strip club owners to bring in foreign dancers just by filling out the proper paper work.

It appears that without immigration the wage rate for strippers would be considerably higher than it is with immigration. Easing the way for foreigners to obtain work permits for stripping means club owners can pay lower wages and earn higher nominal profits (which presumably are capitalized into the value of their firms).

There is, no doubt, some fraud and exploitation in this business. At the same time, I wonder whether some of the concern about fraud and exploitation is just disguised good old protectionism for Canadian strippers. In this respect, is there any reason to believe the economics of stripping in Canada differs much from the economics of mercantilistic protectionism? [see here and here].

Stone-Skipping Efficiency

2005-11-20T00:42:00.000-05:00

Finding flat stones and skipping them across the water is a great activity for kids of all ages. I have some really nice memories of skipping stones with my dad, with my children, with my nephew, and with my grandchildren.

What do you think is the most efficient angle for the stone to hit the water (if you're trying to make the stones skip a lot of times)?[Quotation below and link via CBC, courtesy of cmt]

Throwers should tilt stones about 20 degrees to the lake's surface, an angle first predicted by French researchers last year.

Shin-ichiro Nagahiro and Yoshinori Hayakawa of the Tohoku University Department of Physics in Sendai, Japan, created a mathematical formula to confirm the French experiment.

The Japanese researchers used a numerical method called smoothed particle hydrodynamics to simulate the skipping stone.

They also derived an equation describing the disk's motion.
Both methods provided a confirmation of the magic angle of about 20 degrees.

What do you think the record is for the most skips for one throw of a stone?

38, according Nature magazine, also quoted by the CBC. I guess they must have used a slo-mo replay to count them.

I wonder what the optimal weight of the stone is, and whether the optimal weight varies from fresh water to salt water.

The Recruiter's Pitch:How to Lie As If You Believe It

2005-11-19T00:15:00.000-05:00

I've been on the recruiting committee many times, off and on, over the 58 years that I have taught at The University of Western Ontario. Our initial interviews with candidates are typically held during large conventions in early January. There are several truths about those initial interviews that I wish to share with all of you.

When the recruiter starts telling you about the university and the city after only 10 or 15 minutes, it is usually because they don't want to know any more about you. You will not be short-listed.
Recruiters are not going to tell you the bad things about their university and city. And during the initial interview, it is not wise to ask about them.

Here is a lengthy excerpt from a hilarious posting by Anonymous Lawyer about recruiting in legal profession. It sounds just like what goes on in economics.

I can do the whole pitch with half my brain figuring out how to manipulate associates into doing my dry cleaning. Our mentoring program is the best in its class. Our lecture series has won awards. We’ll teach you everything you need to know. You won’t be flying solo. We have a culture of collaboration. We have a commitment to cooperation. We have an open-door policy. You advance at your own pace. We give you as much responsibility as you can handle. There is no face time. You set your own hours. We treat you like the professional you are. We work hard, but we play hard.
It’s all about the people. We have great people. The people here are like nowhere else. You’ll do good work everywhere, but it’s the people that make the difference. You will love the people here.
We’re a leading full-service international law firm with a proven track record for meeting the needs of our clients. Our clients come first. They rely on us for top-notch service. You won’t find a place with more interesting cases or more challenging work. Our clients are on the front pages of newspapers worldwide. Our work is unparalleled. Our practice is global. Our commitment to excellence is clear. Across all of our practice groups, what ties the firm together is our pursuit of excellence. We’re on the cutting-edge. We serve our clients domestically, and around the world. We have a strong presence in all of the major financial centers. Leaders in business count on us. Our success speaks for itself. Our list of awards is substantial and impressive.
We place a premium on collegiality. We strive to maintain an informal working atmosphere. We are committed to diversity. We treat each other with dignity and respect. We know what really matters in life. Our benefit package is state of the industry. We provide cars home if you’re working late. We provide meals. We provide coffee. We provide a brand-new laptop. Our information technology services are top-notch. Our word processing center is open twenty-four hours a day. Our client services department is there to meet your every need. Our support staff is magnificent.
The atmosphere of small firm combined with the resources of a large firm. The congeniality of a small firm combined with the diversity of a large firm. The one-on-one contact you find in a small firm combined with the kinds of cases you can only get at a large firm. It’s the best of both worlds. It’s the best of all worlds. It’s the best, according to a recent survey. It’s never been better. We’re growing at an unbelievable pace. We have a five-year plan. We have a ten-year plan. Our finances are strong. Our client base is stronger than it’s ever been. Our partnership is among the strongest in the industry. We just bought another floor in the building. The views are amazing. The artwork is unbelievable. The bathrooms are sparkling. We’re in the best part of the city. There’s so much to see. There are so many things to do. There are so many ways to relax.
The people make all the difference. You’ve never seen such a collection of people. I’m constantly amazed by the people here. The people here are unbelievable. We strive to find the best and the brightest people we can. Our people are truly special. It sounds like a cliché, but I promise, you will love the people here, you really will.

Obestatin: A Hormonal Appetite Suppresant?

2005-11-18T01:09:00.000-05:00

There is preliminary experimental evidence that obestatin [cute name for the hormone, eh?] seems to reduce the appetites of rats.[h/t to Jack]

Scientists have discovered a biological brake for a hunger hormone: a competing hormone that seems to counter the urge to eat.
The substance, named obestatin, has been tested just in laboratory rats so far. But if it pans out, the discovery of the dueling hormones could lead not only to a new appetite suppressant, but also help unravel the complex ways that the body regulates weight.
... [N]ormal-weight rats injected with obestatin cut their food intake in half, leading to a 20 percent drop in weight over eight days.
That is not a big weight loss, but these were not fat rats; they would have gotten sick had they lost too much. So Hsueh's next step is to test whether obestatin suppresses appetite and leads to more weight loss in obese rats.
Obestatin also slowed the emptying of rodents' stomachs and the movement of food through the intestines, important steps in countering ghrelin's hunger-inducing effects.
The stomach does not work alone, but is part of a complex gut-brain network where hormones and other substances in the stomach and intestines signal the brain about fullness or hunger.

The research is very preliminary, and at this point, the relative effectiveness of horomonal appetite suppression, in comparison with the implications from other psychological and economic determinants of being overweight is open to question.

First France; Are Alberta and BC Next?

2005-11-18T00:06:00.000-05:00

From the Ottawa Citizen ($ req'd)[thanks to Jack for the pointer]:

Senior French conservative politicians said yesterday that polygamy may have been a factor in the wave of riots that swept the country over the past three weeks.

Bernard Accoyer, leader of the Union for a Popular Majority (UMP) in the National Assembly lower house of parliament, said on French radio that children from large polygamous families had problems integrating into mainstream society.

Gérard Larcher, the Employment Minister, told the British newspaper the Financial Times that such families sometimes lead to anti-social behaviour by youths who lack a father figure and make employers reluctant to hire them.

... “There is clearly a problem with the integration of immigrants and, more importantly, their children,” Mr. Accoyer told RTL radio. “In order for us to be able to integrate them, there must not be more of them than our capacity to integrate them. That’s the issue. It’s like polygamy … It’s certainly one of the causes [of the riots], though not the only one.”

He said polygamy led to “an inability to provide an education as it is needed in an organized, normative society like in Europe and notably France.”

From time-to-time there have stories of polygamous communities in Alberta and British Columbia. Are the young males in these communities equally likely to riot? I doubt it. I expect the real reasons for the riots in France lie elsewhere.

Encephalitis lethargica and Avian Flu?Post Hoc, Ergo Propter Hoc?

2005-11-17T03:51:00.000-05:00

Oliver Sacks and Joel Vilensky in the NYTimes (reg. req'd):

The influenza pandemic of 1918 was followed by another epidemic. The disease was encephalitis lethargica, or the "sleepy sickness," and like influenza it spread through most of the world. Its symptoms were extraordinarily varied - most commonly there was lethargy, but sometimes there was insomnia, and even frenzy; sometimes there were paralyses, sometimes mental disorders.

... The relationship of encephalitis lethargica to the 1918 influenza epidemic is unclear, but we can no longer afford to remain ignorant about it. Economo saw similarities between encephalitis lethargica and a neurological disease - the "nona" - which broke out in Italy just after that country's influenza epidemic of 1889 to 1890. Later research has indeed suggested a recurring association, since the time of Hippocrates, between influenza epidemics and encephalitis-like diseases. In 1982 it was shown that irregularly spaced waves of influenza-pneumonia deaths in Seattle during the early 20th century epidemic were followed approximately one year later by corresponding waves of encephalitis fatalities.

Even though Sacks and Vilensky have a clear vested interest in funding the research, examining whether there is a causal link or merely a temporal link between the two epidemics seems like a worthwhile project.

For more on post hoc, ergo propter hoc, see this Wikipedia entry.

Housing Prices:Slow-Down or Implosion?

2005-11-17T00:47:00.000-05:00

I have been suggesting for five or six months (see here and here) that

if the US housing market is over-heated,
and if housing prices are about to decline in some sense, then
we are more likely to see a slow-down in their rate of increase, and
possibly a decline in housing prices in some markets, but not
a big, flat-out bubble bursting.

Recently, Buttonwood, from The Economist, came to the party, albeit somewhat after others arrived, and with a different outlook.

Buttonwood ... is struck by how precarious America’s housing market is beginning to feel. It has been powering along mightily for the past four years on super-low interest rates and ever-higher house prices. Homeowners have borrowed against their paper wealth and spent it, fuelling economic growth. But none of that now looks likely to continue at remotely the same pace.

After much interesting discussion with which I agree, Buttonwood concludes,

In any event, the housing market reacts to monetary tightening after a lag of one to two years, it seems, so the temptation will be to overshoot. In which case the Fedsters will bring down house prices and the economy itself not with a whimper but a bang.

Whether you agree with Buttonwood or with me, one thing is clear: Ben Bernanke has his work cut out for himself. On one hand he doesn't want to over-stimulate the economy to offset the problems that will likely arise as the housing market cools off; on the other hand, he will not want the lack of stimulation to lead to a recession. From the NYTimes (reg. req'd):

"The contrast between the 1970's and today is very marked," Mr. Bernanke said. "Back then, we had high inflation expectations." He added that the Fed might have waited too long and then overreacted to higher oil prices, helping push the economy into recession.

Today, by contrast, "inflationary expectations remain well anchored" and the Fed could respond gently as long as those expectations remained low, he said.

Mr. Bernanke did not imply that he would stop the Fed's policy of gradually raising short-term interest rates from their low point last year. The Fed has raised overnight rates on loans between banks 12 times since June 2004, to 4 percent from 1 percent, and Mr. Bernanke said nothing to dissuade investors from their view that he would probably nudge rates slightly higher at least once or twice in his first few months in office.

For more on the difficulties facing Bernanke, see Tyler Cowen's piece at Marginal Revolution

It's Snowing

2005-11-17T00:30:00.000-05:00

It is snowing where I live. And to tell the stupid, honest truth, I am excited about it.

I always get excited at the year's first real snowfall, but this year I am even more excited because I recently got a pair of Neos Navigator overboots, [Update: the model I have is called the "Stabil-icer" and it is quite noisy on hard surfaces] like these (only with metal studs in the soles), and I can't wait to try them out.

The neat thing about these boots is that they fit over your shoes, but they're much easier to put on and take off than any other overboots ever made.

A Wal-Mart Summer;a Report from a Biz Skool Student

2005-11-16T02:19:00.000-05:00

In the November issue of Chicago Business Online, Alison Nickum has Part Two of her series [Part One of the series is here] about being a summer intern at Wal-Mart headquarters.

In this installment, she

explains the precision involved with unloading a truck at a typical Wal-Mart store.
describes the intricate pricing mechanism at the Wal-Mart cafeteria [e.g. if you want flavoured creamer or a larger cup, the price is a bit higher because the costs are a bit higher]. Another good example of marginal-cost pricing, assuming the transaction costs are low! In fact I would guess that a major contribution from Wal-Mart has been its relentless push to reduce transaction costs.
describes the "Rule of Ten" -- whenever you are within 10 feet of someone, smile and greet them; if they are customers, ask if you can help them.
explains the "Sundown Rule": respond to any inquiry or request or message before sundown of the day you receive it. You may not be able to deal with it effectively in one day, but let people know you have received it and what your plans are.

No wonder I like shopping at Wal-Mart.
Again, let me say it's too bad the blog, Always Low Prices is shutting down.

Are the French Riots Just Another Step in Some Process?

2005-11-16T01:02:00.000-05:00

Quite possibly they are. The important question is, "What is the process of which they are just another step?"

If it is a process resulting from labour restrictions and discrimination, then policies that promote economic freedom will help to reduce the nature and severity of the problems.

If it is a process of islamification, religious freedom must be both fiercely defended and severely restrained. This apparent contradiction comes from our Judeo-Christian-common-law background which says people must be free to practice their religion, but they may not impose it on others. And when the Judeo-Christian-common-law tradition clashes with Sharia Law and Islamic imperialsim, I will support those gubmnts which support the Judeo-Christian-common-law tradition.

The clash between the two has been underway for quite some time, as Melanie Phillips points out, quoting an article by Olivier Guitta back in 2003:

This extremist indoctrination also extends to French schools, where non-Muslim teachers are subject to daily insults and racist remarks.

... during a high school History lesson regarding the Crusades, a Muslim student yelled: 'Anyway, the Arabs are going to kill the Christians and the Jews.' The teacher then asked him, 'When?' and the child replied, 'I do not know. It was not mentioned on the imam’s tape.'

Many Muslim defendants refuse to be tried by Jewish judges, and some municipal pools have different hours for women and men to accommodate the Muslim population. A number of supermarkets carrying non-Halaal products (food not permitted by the Koran), have been vandalized by Muslims and then surrendered to this violent blackmail by taking the products off their shelves. This is what France has become.

Islamists have the clear goal of transforming France into the first Islamist regime of the West. Their master plan is clearly formulated and being implemented every day.

For more, see this additional piece by Melanie Phillips.
Also see this:

Atlantic Blog is Back

2005-11-15T09:53:00.000-05:00

After being away from blogging for more than two months, the always-interesting Bill Sjostrom is writing and posting again at Atlantic Blog.

Many of us have missed his postings; his return to the blogosphere is welcome news for everyone.

Five questions non-Muslims would like answered

2005-11-15T01:18:00.000-05:00

The title of this posting is the title of an editorial in the LA Times by Dennis Prager [h/t to BenS and JP]. Here are the questions. Please see the original for elucidation.

Why are you so quiet?
Since the first Israelis were targeted for death by Muslim terrorists blowing themselves up in the name of your religion and Palestinian nationalism, I have been praying to see Muslim demonstrations against these atrocities. Last week's protests in Jordan against the bombings, while welcome, were a rarity. What I have seen more often is mainstream Muslim spokesmen implicitly defending this terror on the grounds that Israel occupies Palestinian lands. We see torture and murder in the name of Allah, but we see no anti-torture and anti-murder demonstrations in the name of Allah....
Why are none of the Palestinian terrorists Christian?
If Israeli occupation is the reason for Muslim terror in Israel, why do no Christian Palestinians engage in terror? They are just as nationalistic and just as occupied as Muslim Palestinians. ...
Why is only one of the 47 Muslim-majority countries a free country?
According to Freedom House, a Washington-based group that promotes democracy, of the world's 47 Muslim countries, only Mali is free. ...
Why are so many atrocities committed and threatened by Muslims in the name of Islam? ...
Why do countries governed by religious Muslims persecute other religions?
No church or synagogue is allowed in Saudi Arabia. The Taliban destroyed some of the greatest sculptures of the ancient world because they were Buddhist. Sudan's Islamic regime has murdered great numbers of Christians. ...

Update: be sure to read the comments, which include a set of answers from an anonymous reader.

The End of "Always Low Prices"

2005-11-15T00:54:00.000-05:00

Kevin Brancato has announced that his blog, Always Low Prices, will cease operations by the end of this calendar year. The blog, along with (mostly) Kevin's insightful writings, has been a terrific addition to the blogosphere. That Kevin kept current on so many different Wal-Mart issues was a miracle. And his writing about Wal-Mart was always clear and penetrating.

I posted a few things on that blog from time-to-time, and I spoke with Kevin on the telephone several times, in addition to our numerous e-mail exchanges over the past year or so. He has boundless energy, and so I am certain his continued participation at Truck and Barter will be valued. But a good, market-oriented, empirical, and long-run approach to Wal-Mart questions will be much harder to find now that he has decided to give up the ALP blog.

However, everything already posted at the "Always Low Prices" blog will kept in the archives at Truck and Barter.

The 3 Rs: Rent, (w)Reck, and Return

2005-11-14T02:11:00.000-05:00

Over the weekend, I wrote about having been in a big-box electronics store. I was in Future Shop because I was looking for a digital voice recorder to use for recording and podcasting my lectures. The salesman tried to be helpful, but I had some questions he couldn't answer.

He suggested I try their 3-R programme. When I asked what that was, he said,

"Rent, (w)Reck, and Return. At least that's what we call it here at the store. We have a 30-day, no questions-asked, full refund/return policy.

He didn't know how many people use this policy to "rent" a wide-screen HDTV for major events, like the superbowl; I would be surprised if at least some people don't.

It was a handy policy for me (I didn't like the format of the recorder I tried*), but if I knew what I wanted, I might prefer to pay a lower price at an establishment that had lower costs.

Is possible to pay a lower price at a store that does not have such a generous (and costly) return policy? If not, why not?

*The Panasonic US050 is a superb recorder. I tried out by recording a two-hour show I was in, carrying the recorder in my shirt pocket. The automatic volume control worked well and the sensitivity of the microphone was ideal. The problem was that it records in a proprietary format which most people don't have and hence would not be very useful for podcasting lectures; or that file must be converted to a .wav file, which is humongous (about 230 megs for a 2-hour lecture). Next, I'm going to try an Olympus, which records it files in .wma format, which is about half the size of MP3 files.

The Tragedy of First Nations

2005-11-14T00:47:00.000-05:00

The evolution of relations between North American aboriginal people and the Canadian gubmnts at all levels has been tragic. The result of centuries of interaction has been that people with aboriginal status learn that the gubmnt is responsible for everything that goes wrong and the that gubmnt will (promise to) fix it. This is tragic for several reasons.

It is not always clear what level of gubmnt is responsible, as with the poor water quality in Kashechewan. The feds were blaming the Province of Ontario, and the Province was blaming the feds, and both are liberal gubmnts, so both blamed former tory gubmnts.
More tragically, the lesson, reinforced over the years, is that gubmnts are responsible for anything that goes wrong on a reserve.

If I, in my present cultural mindset, had lived in Kashechewan, I would have moved long ago or organized something locally to clean up the water. I would not have relied on gubmnt provision of bottled water for nearly a decade.

But that is in my present mindset. I have not been taught through the generations that the gubmnt has a responsibility to look after things if I just wait; I have not had dependency ingrained in me . . . . though heaven knows present gubmnts seem to be trying to creat such an impression.

At least as tragic was the response [$, h/t to Jack]. Gubmnts, afraid of not reacting swiftly enough, over-reacted:

For decades, governments have been content to waste hundreds of millions of dollars on bogus solutions to the water crisis on reserves. No level of government has been prepared to make the legal and operational changes required to ensure the safety of water. Kashechewan represents the nadir of waste and incompetence. Out of it, however, may flow a model that can be used to deliver safe water to reserves and other isolated communities across Canada.

The Kashechewan water crisis gave politicians — federal, provincial and aboriginal — the opportunity to spend other people’s money with abandon.
... No one seems to know or care how much the evacuation cost.
While the costs are murky, one thing is crystal clear: The tainted water did not justify the evacuation. Of the roughly 700 health assessments completed by the middle of last week, not one found an illness related to E. coli. [emphasis added].
Meanwhile, the federal government is incurring another set of equally unnecessary costs. Not to be outdone by the drama of the province-led evacuation, the federal government called in the Canadian Forces, asking them to bring to Kashechewan a 10-tonne reverse osmosis water purification unit — a unit capable of treating water contaminated by nuclear, biological or chemical warfare agents.
Although the water purifier requires a crew of three engineers or technicians, the Canadian Forces sent a detachment of 11 engineers and other military personnel to operate it, three two-person liaison teams and 30 Rangers to provide a “presence” in the community.
There was only one problem: The forces and their purification equipment arrived on the scene 13 days after Kashechewan’s own system had begun producing safe water. INAC knew the E. coli problem had been solved. Upon learning of the water contamination, INAC had summoned to Kashechewan Northern Waterworks Inc., a small water treatment firm based in Red Lake, Ont. It had taken a company technician just six hours to repair the malfunctioning chlorination system. The E. coli had disappeared faster than you can say “competent operator.”[emphasis added].

The lesson seems to be that we will not hold political leaders on reserves responsible for making decisisions. The gubmnt further will overreact, extremely inefficiently, once someone alleges the problem is the result of gubmnt inaction.

This chain of dependency must be broken if people living on reserves are to break out of the patterns that have destroyed too many lives on the reserves. Well-meaning, caring individuals must help the transition, but we can no longer have an entire segment of our population treated as if they are incapable of making choices and looking after themselves.

More Socionomological Scatology

2005-11-13T02:21:00.000-05:00

My friend, BenS, is remodeling a bathroom. In the process, he has (literally) looked into hundreds of different toilets.

For negative recommendations, he points to this one.

But for real class, he now suggests the Toto Neorest pictured here.

Even if you are not in the market, check out the features listed at that site.

The Ideal Business Model: on-line pornography

2005-11-13T00:26:00.000-05:00

from former student, Paul Kedrosky:

I think that a valuable startup exercise would be to do a wholesale survey of all emerging technology in the promotion, selling, and distribution of online porn, and then ask yourself which of those technologies and/or approaches could show up first and most compellingly in broader markets. When you think you’ve got it kinda figured out, launch a company around it for non-porn markets.

If the artsy subjects can dress up porn and shroud it in some academic garb, why not the biz skools, too? See this (reg. req'd for the full article):

At Wesleyan University, "grade inflation" has taken on a whole new meaning: One student earned an "A" — for filming another student masturbating.
In his seminar "Pornography: Writing of Prostitutes," Professor Hope Weissman requires students to create their own pornography project, either video, essay or live project. "I don't put any constraints on it," said Weissman. "It's supposed to be: 'Just create your own work of pornography.' "
Wesleyan University is not alone. UC-Berkeley, New York University, UC-Santa Cruz, UMass-Amherst, Chapman University and Northwestern University have all developed "porn curricula." At Arizona State University, a "Sexuality in the Media" course requires students to watch porn flicks such as "Deep Throat."

What should be on the reading list if I were to propose a course on "The economics of pornography"?

Topic: Economics

Most Popular Pet Names

2005-11-12T03:28:00.000-05:00

The most popular pet names, according to a recent article in the New York Post are [the quotation below is from this source].

Buddy, Max and Jake topped the list for male dogs, while Daisy, Molly and Sadie were most popular for females, the New York Post reports of a new survey of 9,000 animal shelters nationwide conducted by Petfinder.com.
Among cats, Smokey and Max were the most used names for males, and Molly, Angel and Lucy were favorites for females. "For real pet lovers, a pet is just another member of the family, so a human name seems totally appropriate," Petfinder.com's president, Betsy Saul, told Post reporter Heidi Singer.

Our favorite names for pets haven't changed much in the past three years. In May 2002, the American Society for the Prevention of Cruelty to Animals (ASPCA) surveyed veterinarians to find out the most popular pet names. According to the Learning Network, the top 10 names were: Max, Sam, Lady, Bear, Smokey, Shadow, Kitty, Molly, Buddy and Brandy. Rounding out the top 30 list were: Ginger, Baby, Misty, Missy, Pepper, Jake, Bandit, Tiger, Samantha, Lucky, Muffin, Princess, Maggie, Charlie, Sheba, Rocky, Patches, Tigger, Rusty and Buster.

I feel so unoriginal. We have a cat named Maxwell, and we once had a dog named Sadie.

If You Have More than Two Remotes, You're Hired

2005-11-12T02:26:00.000-05:00

The Future Shop, a Canadian big-box electronics/computer/appliance store has business card-shaped ads on their check-out counters that say

If you have more than two remotes, you're hired.

Does that mean I qualify to be a senior manager? I have lost count, but I think we have as many as 25 remotes in our home. We have added at least two more to this list.

In consumer theory, we'd say that I am willing/eager to trade off some dollars worth of other stuff for having more remotes conveniently placed around the house.