Tuesday, August 24, 2010

New Strange Course

The guy from down the hall who makes decisions on how we spend much of the income from our $10 million endowment asked me if I wanted to teach a new course.

A local businessman who keeps an eye on the regional economy said that we are shifting from agriculture to health care. He wanted to know the impact of this shift.

The guy from down the hall wanted to create a course that would do a research project exploring how this shift would affect the region. The course would have 5-8 students and would produce a substantial study of the topic, which we would publish in a scholarly journal. This is not my usual macroeconomics course.

I thought for a moment and decided that I might enjoy it. I told him I would take the chance and began thinking about how I would prepare to teach the course next spring. He left.

He returned with my associate dean, who asked which of my normal classes I would like to give up in order to teach the new class. I said, "I usually teach three of the same course."

He said, "But which one?"

I paused. "Do you mean this semester?"

"Yes, starting tomorrow."


Well . . . uh . . .

So I am teaching this odd course with zero preparation.

Except now we only have one student who wants to take it. So I do not know what they will do. They already have a part-time faculty member teaching one of my sections.

I cautiously await.

Monday, August 23, 2010

New Class Tool

I am using Facebook to pass information to students in my courses this semester. Since I do not want to see what they are posting to their friends, I am hiding their posts. One can easily learn things one would rather not learn.

Monday, July 26, 2010

Brave New World

I recently saw this on Facebook.

"Progress usually is a result of people who take an unpopular position. 'Well, we've always done it this way is the worst excuse we can use."'

This is 99% garbage and 1% correct.

The reason we do things in the ways we currently do them is that those ways work. 99% of the time when we strike out to do things in a new way, Old Lady Reality slaps us across the cheek and says, "Idiot! We do things that way for a reason!"

Thursday, June 3, 2010

Paul Solman And Economic Theory

I saw Paul Solman, a PBS economic journalist, at an economics teaching conference in Pittsburgh in 2003. He showed us a video of his report on how the new tax cut on dividends would not affect financial markets, since companies would not actually pay dividends. As evidence, he interviewed a top executive with Harley Davidson, who did not see how the cut to their shareholders' dividend taxes would affect HD--so HD was not going to pay a dividend.

My response at the time was that both Solman and the HD executive were wrong. They were both concentrating on supply, but were neglecting demand.

People buy stock to enrich themselves. The dividend tax cut meant that people who bought stocks that paid dividends could keep more of their income; hence, after the tax cut people would be willing to pay more for stocks that paid a dividend. Therefore, companies that paid dividends would have a higher market value and would find it easier to raise money.

Sellers do not care that much about your tax bracket, except when it influences you to buy their product at a higher price. They do not care about your demand, per se. But in the market, either they respond to you or they fall behind.

Today I read on Harley Davidson's website that they pay a dividend. Economic theory is powerful.

Saturday, May 1, 2010


I believe in freedom.

Like nearly all economists, I believe that freedom to trade makes us better off. This trade includes free trade of labor.

If I am made better off by trading with someone across town (maybe she mows my lawn) then there is no reason that I cannot also be made better off by trading with someone in another state. Perhaps someone in another state can so something for me cheaper or better than anybody in my town.

Non-economists might say, at this point, "But you are killing jobs in your state by trading with other states." That is true. Just like when I hire someone across town I am killing a neighborhood mowing job. Get off my back, neighbors! I should be free to hire whomever I want.

If I buy Wisconsin cheese I'm putting a Georgia dairy farmer out of work. Too bad it's more efficient to do dairy farming in Wisconsin. Should I support people who want to raise reindeer in Georgia since the climate is all wrong for the reindeer? Enough with you pushy reindeer ranchers!

And if Wisconsin seceded from the U. S., it would still make me better off to trade with them, rather than starting up more Georgia dairy farms.

So I believe that trading with Mexico or Lichtenstein or Japan makes us better off. We only engage in trade with people who can do it better or cheaper or will do lousy work that we do not want to do.

And if it is efficient to import grapes from Mexico, then it may also be efficient to import grape harvesters from Mexico and put them to work in grape orchards. If it did not make me better off, the vineyard, who wants my business, would not hire them.

Yes, somebody will be hurt by immigrant labor, just like that poor Georgia dairy farmer is hurt because I buy cheese from Wisconsin. This is the way that resources go to their most valuable use. (Warning, this link contains strong language.)

But I insist that we not import problems into the U. S. We have enough murderers and thieves here. Let's do a background check on anyone who comes in. Further, we need to keep the murderers and thieves from sneaking in.

I would also insist that not one dime be taken involuntarily from anyone and given to those poor grape pickers. Sorry, no public schools. No public health care.

But, if you have read my views on freedom, you already know that I do not want a dime to be taken from anyone involuntarily to support that Georgia dairy farmer either.


Last fall my son picked me up at work and made an illegal turn as he left the parking lot. Campus police pulled us over. My son did not have his license with him.

The cop chewed my son up one side and down the other, then chewed on me for a while. How could I let him drive without a license? I did not tell the officer that I do not usually frisk people before I get in the car with them--I did not even tell the cop that I remind my son to grab his license every time he leaves the house. How could I let him make an illegal turn? I did not tell the officer that fighting my son for control of the steering wheel as he started the illegal turn could have been dangerous.

The cop seemed ready to haul my son in. If I had not worked for the university my son would have likely been arrested for driving without a license and making the illegal turn. After all, my son once spent a night in jail because he did not obey an officer directing traffic at night at a Y intersection on an unlit curve in the road--because he did not see the officer until he was upon him.

You may not like that we have to carry I. D. when we drive. Heck, legal residents of the U. S. who are not citizens are instructed by federal law to carry their green cards. MyVenezuelan brother-in-law always carried his green card. It's not that hard.

So what is the big deal about the state of Arizona saying they would detain those who were stopped in the normal course of police work if they could not show ID? I do not hear a lot of logic from those who object to Arizona's new law. I just hear the chant of "Nazi, Nazi, Nazi."

If requiring I. D. is the test of a Nazi regime, then our requirements to carry driver's licenses and green cards for non-citizens made us into Nazis decades ago and the chanters are just waking up to that. The chanters should all burn their driver's licenses.

I hear a tumult of illogic that police in Arizona are going to detain every Hispanic in Arizona. The latest census says Hispanics make up 30% of Arizona's population. Are the police really going to pull over one of every three cars and ask for ID? The prison population of Arizona is (by my best Internet search) 30,000. Are the police going to arrest the 2,000,000 Hispanics in Arizona and make their prison population 2,030,000? That could be expensive.

Can't you folks in the other world think about this just a little? Or is it just that you enjoy being outraged more?

Wednesday, April 21, 2010


Some medicine had been called in to the only all-night drugstore in town. The store was busy so the prescription not ready until around 3:00 AM.

Since it was so late, I went as I was--shorts, tie-dyed purple shirt, flipflops, and hair past my shoulders instead of bound in a ponytail.

I was on my way back to the truck with the medicine when I saw a huge rat run across the parking lot, climb up on the tire of my truck and disappear up into the underside of the truck. Where could it have gone? I waited for him to leave. He did not. I approached cautiously.

I jumped in the truck and slammed the door quickly. I did not know if the rat could get inside the truck from the outside. There should not be any holes big enough, but I know rats can get into places they should not be able to.

I cut a couple of donuts in the empty parking lot to see if I could sling the rat out from under. I did not see him leave. On the way home I hit every pothole that I could and changed my route in order to go over some bumpy railroad tracks. But there do not seem to be any bad potholes when you need them and apparently the road crossing the tracks had been smoothed.

I slung the truck into the parking lot of Catfish Cabin and cut a couple of donuts, then slung it back onto the road. Then I saw the blue lights behind me.

I pulled into the parking lot of an auto dealership. The officer told me to get out of the truck. I realized that I was wearing my cut-offs, tie-dyed shirt, flipflops, and had mountain-man-hippie-hair. There was no way I was going to avoid being hauled in.

Then he looked at my license and asked me why I was driving so erratically.

And I realized that I was about to tell him about a huge rat under my truck at three in the morning. No way.

But I did. I told him about the rat. He looked the truck over and said, "Is he still under there?"

I said that I did not know--I never saw him leave.

He thought it over and said, "Drive safely on the way home."

I did.

Saturday, April 17, 2010

Move Over Beckett

Secretary of the Treasury, Timothy Geithner talked about the "too big to fail" problem this week. He said "when large companies manage themselves to the point that they cannot survive without the government, that we put them out of existence."

So if a company gets too big to fail, they kill it.

Geithner is the new master of the absurd, filling the shoes of Lewis Carroll, Samuel Beckett, and John Cleese. If they are too big to fail, we will not let them fail, we will kill them.

Perhaps next week Geithner will decide that attempted suicide will now be punishable by the death penalty.

Thursday, April 1, 2010

What Is Important?

I was giving a test that started at 8:00 this morning. I had my laptop on and my work email up. At 8:36 a student mailed me. She was "stuck" at registration and would have to miss the test. Could she take it tomorrow?

I thought, "She's five minutes walk from the classroom. They won't let her leave? Taking a test is not as important as registering now?"

Those were the negatives. On the positive side, she was not lying. I suspect that half of the students who take makeups lie about having to miss the original test. Since she was not lying, I mailed back, "You may take the test with another class at 9:35 or not at all."

She replied, "I can't take it then. I have a class."

I began to understand. Taking a test was not as important as registering. It was not as important as attending another class. I was tempted to ask, "Is taking this test the least important possible use for your time?"

But I didn't. I answered, "Then I will assign a zero on the test."

She replied, "I will talk to my teacher at 9:35 and see if it is OK."

She showed up and took the test.

I cannot spend a lot of time worrying about a young lady who is so self-centered, putting emphasis on anything immediate and expecting me--who has the job of evaluating her--to fit myself into her schedule. But I have taught for over twenty years, and that was a first.

Sunday, February 28, 2010


I heard an excellent Econtalk.org podcast this morning. Mike Munger put it something like this.

People want to get rid of the money and lobbying to influence politics. But that is the symptom, not the cause.

If we give away wealth, people will compete for that wealth. Giving away wealth brings money and corruption into politics. If you want to reduce the symptom, advocate eliminating the cause. Advocate that government stop giving wealth away.

I thought he boiled it down well. So I will belabor the point by creating a non-government analogy, in direct opposition to his concise wisdom.

If Walmart opens the door every Monday and gives everything in the store away, people will fight and scratch to obtain their weekly or monthly food and necessities and luxuries, resulting in injuries and deaths. Free market prices provide orderly competition and eliminate the fighting and scratching.

Tuesday, February 23, 2010


Words do not usually hurt me. When someone in grade school called me a "bastard" it never made an impression on me. When I saw someone rage at being called a bastard, I wondered if there was not some special sensitivity there--perhaps the kid's parentage was in doubt.

I have some Native American ancestors. Even though my personal experiences are far removed from my ancestors' I feel a kinship. The word "Injun" does not bother me, though, even when people might apply it disparagingly to my downtrodden ancestors.

My immediate ancestors were called "white trash." I often refer to my personal habits as part of a white trash heritage--to the shock and horror of those who say, "Human beings should not be referred to as trash!"

As Space Ghost once said, "Yeah, whatever."

Words that were once merely descriptive, such as "bastard," "idiot," and "moron," were destined to become pejoratives, leaving us to find more sanitary descriptives. "Poor countries" became "the third world," then "developing countries." The new descriptives become outre, and the process continues.

Now "socialism" is coming to be seen as pejorative. My view of the word is that socialism describes an economic system under which the individual works for the good of society. Capitalism describes an economic system under which individuals are free to work for the good of whomever they wish--mostly themselves.

Socialism has a bunch of branches and I glaze over when a socialist thinker finely parses the thicket. I have satisfied myself with understanding these three: communism (we own everything and we tell you how to serve society), facism (we don't own everything but we tell you how to serve society), and the soft socialism of Europe and America (we don't own everything but we tell you how to serve society and we take your income and use it for society).

I am not a fan of socialism. I am a fan of freedom. Under socialism, if you disagree on how society is best served or if you do not want to serve society, you will be coerced by force or by the threat of force to serve--if there is no threat, then the socialist system devolves to capitalism, in which people serve whatever they want to.

Since "socialism" is now pejorative, what will we call people that we formerly called "socialists?" Perhaps we will find an term like Warmfuzzies, which will last for a few decades until people recognize that term for the slur that it is.

Sunday, February 21, 2010


It sank almost 100 years ago with 1,500 people aboard. Get over it, people.  It is not that interesting.

Friday, February 19, 2010

Writing News

My story, Refiner's Fire, was one of eight finalists in Writers of the Future's* fourth quarter 2009 contest.  Alas, it did not place in the top three, which would have guaranteed that it would be published in their yearly collection of stories.

I am left slightly better off than I started.  Finalist status confirms that I can write a really good story, as judged by someone who knows--the judges are successful writers.  In my arrogance, I always knew that I write good stories, but it is good to have that confirmed.  I think that there may be 10,000 people out there writing good stories.  There is room for 4 new writers this year, as judged by observing agents who get 300 queries from authors per week and ask for a partial manuscript from 1 author, who already has some writing credentials.

A place in the WOTF volume would have been a credential.  So I am about where I started with regard to having a writing income.  I will submit another story this quarter, raising my lightning rod in case a storm blows up.


*WOTF is the world's foremost science fiction and fantasy writing contest, judged by professional authors.  Their yearly collection of winning stories is published in mass markets.  I can find it at the department store in my small town.  The judges and staff are the best.

Does This Bus Stop At 82nd Street?

Ben Bernanke, the Fed Chairman (oops, just lost Rasa on this post), charted a course to take a road trip to Terra Del Fuego, at the southern tip of South America.  He confidently strode to the parking garage, strapped himself into his Beemer and drove for a block and a half.  Then he realized that he was using a map from 1932.  He went back to his apartment and found there was no map to where he wanted to go.

Bernanke has shown supreme confidence that he can suck $1 Trillion out of the banking system at will (the banking system usually has about $2 billion in excess reserves--the two differ by a factor of 500).  To say that no one has ever faced such a task is akin to saying that I have never beaten up the Toronto Maple Leafs.

In taking the first move to return to normalcy, Bernanke cut the rate at which the Fed lends to banks.  Markets dove.  Bernanke said, " That is not it at all. That is not what I meant at all."

So the first glitch happened on Bernanke's first action.  The surprise was delivered by rational expectations theory.  That is, people watch what you do, figure out what you will do next, and make plans accordingly.  People know Bernanke is going to start sucking money out of the system.  They saw the first sign.  They sold.

Bernanke said, "No, no, not yet!"

But people watch what you do.

Bernanke has lingered in the chambers of the sea
By sea-girls wreathed with seaweed red and brown
But human voices woke him.

Terra Del Fuego, here we come!


Apologies to T. S. Eliot

Monday, February 15, 2010


Things went well. We found a cheap (and inexpensive) hotel. We ate and talked.  His food was excellent, mine was barely passable. We slept fairly well from 9 P.M  to 3 A.M.. We showered and packed and found that the Waffle House was full at 3:45. So we went to the airport.

A 6:30 flight? No problem. Few flights will be going. Lines will be nonexistent. Security will be depopulated. Well, no.

At the busiest airport in the world, the leading airline, Delta, had one lone person checking bags in.* After being in line for about 45 minutes, I wondered if we would make it through by 5:45. If we were not done by 5:45, they would not let him fly because they demand time for the bags to be searched and for him to be supersearched if need be.

We made it.

But we could not sit down and eat with so little time. He could not relax until he was through security on time. So I said goodbye to my nearly-twenty-year-old son at the beginning of the security queue.

He has been with us the longest. I'll miss him. Maybe I'll see him in six weeks.

*As an economist, I should have forseen the paucity of Delta personnel.

Saturday, February 13, 2010

Not A Cent

Bush's final Treasury Secretary, Henry Paulson, arranged a shotgun wedding in which Bank of America bought the ailing Merill Lynch.  BoA was given an escape clause if Merill proved to be a millstone.

Merill proved to be a millstone.  The BoA president told Paulson that he would escape.  Paulson threatened him to hit BoA with a government regulatory sledgehammer to spite BoA for upsetting the government's applecart.

Now Paulson is selling a book.  I will not pay a cent for the book.  I will not rent it from the library.

Paulson is a thug.


Friday, February 12, 2010

Learning to Lighten Up

When I was seventeen I worked for the Council on Aging.  I worked with a 67 year old and a 76 year old--handymen, riding around the area, doing small repairs for old folks.

We screened doors and porches, we replaced rotting boards in floors.  We fixed plumbing.  We did about everything one can do around the house.

The young guy, Albert, could not say "no" to women.  So when an old woman would ask him to plumb her trailer, he would say, "We would have to take out the wall, and we might not get it back together."

To which the old woman would reply, "Well, then that's what you have to do."

And Marion would grumble under his breath, "He can't tell her 'no.'  He just tells her how hard it would be, and she cares about it getting done, not about how hard it is."

My dad had begun to teach me to lighten up.  Albert and Marion finished the job.

They would drive a nail in two strokes.  I took around twenty strokes, and would have to redo every fifth nail.  Marion would say something like, "I don't think that nail is scared of you, John."

Or Albert would say, "We pay by the nail, not by the stroke."

One day I had enough and snapped back at Marion.  It surprised him.  He apologized.

And I realized how stupid I had been.  It is strange that thickening my hide was accomplished by someone who only showed me how thin my skin had been.

Tuesday, February 2, 2010


In 1980 I drove around my town and asked people to fill out their U. S. Census forms.  The folks that I visited had already ignored multiple requests, so they were not interested.

One old woman thought that the U. S. government was cooperating with the Russians so that when they took over that they would know how many rooms she had so they could quarter troops.

I warned one woman, as I had been trained to do, that the next visitor with a census form would be a federal marshal.

I was such a jerk.

Monday, February 1, 2010

Mr. Hood

Your employer pays you because you create more value in working than you use up in resources.  You buy stuff that gives you more value than you have to sacrifice to get that stuff.

Now Robin Hood takes $1 from you (who earned that dollar by providing more than $1 in value) and buys a geegaw for me (you would have spent the dollar on a doodad that gave you more value than $1).  Robin Hood does not know me well, so the geegaw he bought for me is only worth only 50 cents to me.  So Mr. Hood destroyed your more than $1 worth of value to give me 50 cents worth of value.  Mr. Hood made life worse, overall.

And if Robin Hood keeps visiting you, you may end up spending money on hiding your money from Hood.  But hiding your money gives you no direct satisfaction--the doodads you would have bought if there were no Mr. Hood do give you satisfaction.  So more value is destroyed.

Of course, Robin Hood is a government that redistributes income.

This is all too optimistic, though.  Robin Hood knows where the money is coming from and where it's going.  Government is so big, it has no idea.

Friday, January 29, 2010


The public school system turned one of my sons against government.  The system has perverse incentives.  He was talking to me about bullying.

In my experience and my son's, teachers turn a blind eye to bullying.  Now and then teachers and administrators work around the edges, but they are reluctant to get serious.  Here are the incentives.

If little Aristotle bullies little Socrates and the school lets this happen, what is little Socrates' parents' recourse?  They can demand the school do something.  Suppose the school does nothing?  Probably nothing happens.  Socrates' parents can sue.  To the parents' attorney, the school presents the paper trail they left that showed they were doing something to try to stop the problem.  The paper trail may be two sided, since the bully, little Aristotle, denied and lied at every stage.

Suppose the school expels little Aristotle?  Little Aristotle's parents have ironclad evidence that the school expelled their son.  Yes, the school has a paper trail, which may be two sided.  But there is clear evidence that the kid was expelled.  And maybe there is some theory by which the school singled out Aristotle.

Little Aristotle's case for being expelled is much stronger than little Socretes' case that the school should have done more.  Bad incentives guarantee that most of the time the bullies win.

Friday, January 22, 2010

Part Time Job

At sixteen I had a job as a night watchman at a funeral home.  They would call me when they had a body and I would spend the night.

In the rear end of the building was a small living room with a television.  Sometimes I had to bang on the side to get the picture right, but it had cable back in the days when cable did not cross the mill pond and go into the little community where I lived.  I would invite friends over and we would play games and pop popcorn.

There was a bedroom, too.  In the morning I would shower and drive to school.  For that, I made $20.

When the heating or cooling system would kick on, it would make a few loud bumps, which would make me jump.  Other than that, the job was sheer gravy.

At one point someone mentioned that I was there for insurance purposes.  Other than that, nobody ever told me what I was watching for.

Monday, January 18, 2010


Things fall apart; the centre cannot hold -- William Butler Yeats, The Second Coming

Systems tend toward disorder.  This is a casual paraphrase of the Second Law of Thermodynamics--the Law of Entropy.

Orson Scott Card's "Alvin Maker" books frame evil as the destructive force, which the world tends toward, like water flowing downhill.  Whereas good, the constructive force, must work against the tide.

Things wear out, rocks erode away, the sun cools slowly.

Over a decade ago, I read something that Marilyn Vos Savant wrote.  I paraphrase it, thus.  Information is not subject to entropy.  That which stores the information is subject to entropy--paper decays, your hard drive crashes.

Other than Card's "Alvin Maker," I have not read anything which makes entropy a character in a story.  But now I am thinking about it.  Right now my ideas are soup.  I have to overcome my own entropy to make it into something solid.