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!"

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.

Immigration

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.

ID

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?

Rat

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.

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.

If we survived the utter destruction of the World Trade Center, no company is too big to fail.

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.