Thursday, December 28, 2006

Scott Speed and Red Bull

Here’s to hoping that Scott Speed stays in Formula 1 because the maneuvers that Red Bull has been making with its primary and sister team operation are at times baffling. Well, at least they were baffling until I realized yet again the real economic incentives to finding a driver.

Obviously, a great way for drivers to get sponsorship money is to start winning, but when they’re not on a fantastic team, circumstances can be quite difficult, especially for an American whose native country loves Formula 1 as much as it loves Are You Being Served? So, the problem is that the Red Bull Racing / Scuderia Toro Rosso test/race driver Robert Doornbos has the personal financial/sponsorship backing that Gerhard Berger is seeking to keep the team in a worthy financial position, which might leave Scott Speed out of a racing seat.

It would be a true shame if this were to happen considering that Speed’s season in 2006 was not as bad as Scott Speed’s critics would have me believe. There are also many other implications as well. Liuzzi and Speed both came out of the Red Bull young driver program, but Red Bull’s primary team has no such driver lineup - instead they've gone with vertans David Coulthard and Mark Webber. So, if Liuzzi or Speed were to vacate their racing seat, the Red Bull young driver program would essentially be proven as unessential.

So, to have a Formula 1 team, you need to fund it, and I think by the beginning of the season we’ll find out how badly Scuderia Toro Rosso is in need of capital.

Wednesday, December 27, 2006

Pigou Taxes

In this recent paper (Taxing Consumption and Other Sins) from James R. Hines Jr., Hines examines the disparity between the US’ consumption taxes compared with other countries.

The U.S. doesn’t used a value-added tax most likely because too many people would argue that it’s regressive in implementation, which would make it very difficult to pass as legislation. On the whole, consumption taxes in the U.S. are low, and most states enforce their own state taxes.

Still though, the U.S. does use some excise taxes. The gasoline tax makes up a huge chunk of the excise taxes in the U.S. (45%). The gasoline tax is about as close as we’ve gotten to a genuine “Pigou” tax.

According to Hines, the U.S. in the past has often created excise taxes when in need of revenue and then later gotten rid of those taxes. In most cases, the taxes needed to be raised for funding of certain wars. There has always been opposition over excise taxes (e.g. The Whiskey Rebellion) even when the tax is on a “sin.” However, when the government apparently gives into the will of the people, they are really just making a trade-off of what gets taxed…

The government of Thomas Jefferson abolished all federal excises in 1802, balancing its budget instead with tariffs, land sales, and military spending cuts (Dewey, 1907, p. 120).

Where Hines really starts to make reference to Pigou taxes is here…

The federal gasoline tax, introduced in 1933, discourages driving and thereby reduces pollution and traffic congestion; furthermore, since 1956, federal gas tax revenues have been parked in the Highway Trust Fund, which finances the construction and maintenance of interstate highways and urban mass transit projects.

The taxes are obviously not always efficient. Hines explains that the government’s LUST tax (to clean up underground storage tanks) “collects more revenue than it spends each year, its surplus seeping (MK: what a great pun) into the U.S. treasury.” However, when the taxes are efficient, they can provide great service to the items they tax. Some examples Hines includes are the federal tax on rifles and fishing tackle.

Hines also makes note that taxing liquor seems to be consistent for the US as well.

But back to gas…it turns out that the US consumer doesn’t pay that much for gasoline relative to other countries. Now while the economists, or anyone who ever traveled to another country knows this, I think we’d be surprised to find out just how many people still either don’t know how much better off we are, or simply don’t care. Also, as it turns out, we don’t tax alcohol that much either relative to other countries.

…but any of these comparisons classifies the United States as a low tax country.

This paper leaves me wondering though that if we increased tax rates (in any manner) would the size of the government also increase to a more inefficient amount? Should we not tax "bad" things because of this fear? In any case, the U.S.’s excise taxes are half of other OECD (Organization for Economic Cooperation and Development) countries. Also, the US tax system is the “least environmentally oriented” of any OECD country. And in terms of these environmental taxes, once again the U.S. taxes half of what other OECD countries do.

And for the many people who cry out “commie” when they hear of taxes, it’s important to note that Hines’ paper sees that the OECD countries that use value-added taxes have more open economies. Also, for those that might argue that value-added taxes might hurt small business, it really depends on the regulations that come afterwards. And to address the regressive argument against a VAT…

For example, Michael Graetz (2002) has proposed one version of such a comprehensive U.S. tax reform, that includes a 15% VAT, elimination of personal taxes on the first $100,000 of income, reduction of payroll taxes for low-income workers, and other features designed to maintain progressivity.

And even a flat tax on gas would have some progressive effects. Don’t believe me? Here’s Hines…

Poterba (1989, 1991) and Walls and Hanson (1999) analyze U.S. gasoline taxes from the standpoint of lifetime incidence, finding that gasoline consumption rises more than proportionally with affluence over much of the range of total spending, suggesting that gasoline taxes are progressive, albeit less so than income taxes.

So, is a government excise tax increase possible? One thing is for sure, the current tax system would have to go through a major overhaul because states would have to re-work their own sales taxes.

And as for those excise taxes, even if they are not perfect and don’t have very sensitive tailoring, the taxes can still be beneficial by reducing the amount of harmful externalities by associating a cost with those externalities that would be realized in the present transaction.

So, would it be hard to start excise taxing (taxing “sin” as Hines likes to put it)? You betcha! Lobbying would still be a horrendous problem. Also, even my good friend,
William Zeallor made mention to a culture of materialism that seems to be manifesting. And in terms of a value-added tax, both political parties in the U.S. hate it. “Democrats think it is regressive, and Republicans think it is too easy to raise revenue with one.”

Tuesday, December 26, 2006

George Will on Blogging and Online Media

Now that the major brunt of the holiday season is over, I hope to get back to posting on a regular basis. For now, I’d like to take a moment to mention this article by George Will on blogging and online media.

I like the article on many fronts. First, Will explains the outright idiocy of naming the Person of the Year, “you.” (or me):

Most bloggers have the private purpose of expressing themselves for their own satisfaction. There is nothing wrong with that, but there is nothing demanding or especially admirable about it, either. They do it successfully because there is nothing singular about it, and each is the judge of his or her own success.

George Will is exactly right. First, let’s simply face the fact that even the best bloggers who publish (e.g. Andrew Sullivan) have an enormously large amount of hatred brought on towards them. And if you don’t want to call it hatred, then it has to be the most undignified form of critique to which I have ever bared witness. And that’s the best. What I do is a FAR cry from Greg Mankiw, so you might as well throw me in with the rest of people that George Will is eluding.

Will throws the final blow as such:

Time's issue includes an unenthralled essay by NBC's Brian Williams, who believes that raptures over the Web's egalitarianism arise from the same impulse that causes today's youth soccer programs to award trophies -- "entire bedrooms full" -- to any child who shows up: "The danger just might be that we miss the next great book or the next great idea, or that we will fail to meet the next great challenge . . . because we are too busy celebrating ourselves and listening to the same tune we already know by heart."

The fact that Stengel included Williams's essay proves that Stengel's Time has what 99.9 percent of the Web's content lacks: seriousness.

A great op-ed piece from Will and here’s to hoping that if you provide content on the web, that you are actually providing something that isn’t wholly self-serving.

Tuesday, December 12, 2006

Arnold Kling and Blogs

In this post from Arnold Kling, Arnold makes mention about what attracts his reading eye to certain blogs.

I've noticed that one of the characteristics that is common to a lot of blogs I like is that they have a "thinking out loud" feel to them.

I can only imagine that if my writing were anymore “stream of consciousness,” I would have the majority of my posts deal with the topic of the Cookie Monster’s origins and if he really had any seething hatred for Big Bird.

Sunday, December 10, 2006

Websites Popping Up Everywhere

Apparently, these days you’re not cool unless you’re on the Internet. I have some old friends from college who have put up their own website, called “Closed Concepts.” I’m not exactly sure what the purpose of the site is yet, but it looks like they’re uninformed just as much as I am. Being they say that this is part of an “e-journey toward e-enlightenment,” I’m thinking we’ll all find out their purpose together.

However, to the core of the matter… Economically speaking, since the cost of publishing yourself on the Internet is free, why not do it? And if you can afford the money to have your own domain, then these instances of having your friends put up websites for purposes that we’re not sure of will probably continue to occur. Like I said, at this cost, maybe the question isn’t why, but why not?

However, running and maintaining the website and continuously makings posts or providing new content requires time and/or money. So, that ends up being a cost. As I’ve seen personally, my friend Will has been studying and working so hard at Loyola that we’ve rarely seen an update from Blogicology.

In fact, if you yourself wonder what makes a website (or more relevantly, a blog) awesome, then check out this post from Scott Ginsberg.

Saturday, December 09, 2006

BT touring with Thomas Dolby

BT is one of my favorite musical artists. And he's touring with Thomas Dolby performing from This Binary Universe.

I would normally put up a review, but This Binary Universe is just so different from anything I have ever heard before. To put it bluntly, it's a modern electronic composition. If you can catch the tour, I highly recommend it.

Friday, December 08, 2006

Bryan Caplan on the Religous Gender Gap

A very interesting post that I think is a must read by Bryan Caplan at Econ Log. Bryan uses two different reasons regarding why women are more religious than men (the religious gender gap).

I’ll use just use a few snippets, but I really mean it when I say that his entire post is a must read.


On a deep level, then, men are more inclined to want some hard proof that religious claims are true, while women are more willing to take religious teachings on faith because they sound nice. Burn me at the stake if you must, but it's true.


As traditional mores break down, however, men feel freer to be themselves - and share their doubts with others. In contrast, since their piety was relatively sincere from the start, women don't respond much to the fall in social pressure.

I can’t help but agree with Bryan’s reasoning here. I’d like to see people try to counter his argument.

Robots are the Future

In case any of you were worried that you might get too drunk to make that favorite drink of yours, there's good news on the horizon.
My favorite quote:
"And if you have a robot that talks to you and insults can be sure that people won't forget him," Calkinds said. "Of course, I could build a robot that irons shirts or something, and that would be just as difficult. But having a cocktail robot is just much more fun, and even if your robot doesn't work, you still have a party."
This is part of where the future is taking us, unfortunately, I don't drink alcohol. Although, I'm sure they could program them for milkshakes.

Thursday, December 07, 2006

Media Ownership

Just as I had slyly mentioned Rupert Murdoch and News Corp in a post about media slant, it turns out that News Corp is buying out its shares from Liberty Media.

The deal would give Murdoch more control over his News Corp empire.

As I said in that previous post, while in newspapers it doesn’t seem to matter who owns the company, maybe the case (and the incentives) are different for other media conglomerates.

Tuesday, December 05, 2006

Newspaper Slant

In this latest paper from Matthew Gentzkow and Jesse M Shapiro, they research media slant, but add a test for the owner’s influence on the newspaper in question.

The key bits of the paper…

…consumers are more likely to read a newspaper whose slant is close to their own political ideology. This creates a strong economic incentive for newspapers to tailor their slant to suit the political leanings of their geographic market…

..owners do not exert a greater influence in areas where the political returns to persuasion are highest. Taken together, these findings further support the view that owners exert at most a small or modest role on the ideological content of the news.

So, while I am not sure about 24 hour cable news and how much Rupert Murdoch might influence Fox News, the print media seems to do exactly what it should do economically.

And if you don’t know about this site (, now you do. It’s a great resource.

Sunday, December 03, 2006

Hawking's Latest

And I quote...

Sooner or later, disasters such as an asteroid collision or nuclear war could wipe us all out. But once we spread out into space and establish independent colonies, our future should be safe.


However, we can still within the law, by using matter/antimatter annihilation, at least reach just below the speed of light.

With that, it would be possible to reach the next star in about six years, though it wouldn't seem so long for those on board.

Any one of my friends wants to chime in on that?

Tuesday, November 28, 2006

Jude: Redemption

Jude released Redemption in the US through CD Baby earlier this month. Relative to his prior albums, it’s a mix of sounds from earlier years that provides Jude with another fresh start.

The album shows the release of tracks that Jude had exercised in his live shows for years now, but chose not to release on Sarah. Those tracks include: “All I Want to Do,” “Love, Love, Love,” “Run to My Room,” “End of My Rainbow,” “Your Eyes,” and “Fly Again.”

In regards to his previous release (Sarah), the album has more upbeat tunes and electric guitars, but still attains a much more charming and down to earth feeling then King of Yesterday. Simply put, Redemption is Jude in his finest form.

The Christian Coalition's Views

This is significant. The story proves that what Jim Wallis has been saying is true. The religious right, as shown here by the Christian Coalition has been only focusing on two issues (abortion and gay marriage) and essentially hijacked the real meaning of Christianity from many followers.

The Car

Many people wonder where my love of cars comes from and how it manifests itself in my life today. Well, I think it’s time people realized the wonderful world of automotive marketing. So, let me introduce the 2005 Subaru Impreza WRX Sti.

Well, since I adored karting as a child, I ended up with a love of many kinds of open-wheel racing. Formula 1 has since then become my staple. But through the years, I still wanted more application; racing that showed me more relevance. I then discovered that the same automotive body that governs Formula 1 also governs the World Rally Championship.

Now, while the “WRC” cars are mocked up versions of the vehicles they represent, the P-WRC cars are essentially the cars we buy.

The P-WRC is a support championship to the WRC, open to drivers or teams using near-standard road cars which are mechanically identical to those sold in the dealer showroom, with modifications made only to improve driver safety.

So, naturally I was ecstatic when I made the purchase of my car. As a fan I get to actually drive the vehicle that the pros do. Now, with all that said, I found out that the amount of control that these drivers have is exceptional, which is why I believe cruise control comes standard on these cars. And as I found out, when on public roads (i.e. driving from stage to stage or back to the service park), the drivers also use cruise control which has even been installed in the premier WRC vehicles. Obeying the law is of course the priority.

And as far as I understand it, there is one more difference between my car and the P-WRC cars. They use the Japanese spec Subaru WRX Sti’s. The difference there is that they use a 2.0 liter engine with more boost from the turbo, whereas US-spec Sti’s use a 2.5 liter engine with less boost. (The WRC clearly states that when they homologated the cars, that 2.0 liter was the maximum displacement).

So, essentially, in the end, I’m a horrible victim of marketing. I see my own vehicle as a bona fide race car (even though it’s the Japanese spec car they use in the WRC) because Subaru decided to make the car available to the American market. The caveat here in the US is that I highly doubt the majority of Subaru owners would give two cents about rally cars and their heritage. So, buying an Sti for them wouldn't mean what it means to me exactly. To put it simply, the Japanese marketers didn't exactly get these cars to sell in the US thanks to rallying, but rather to the movie franchise known as The Fast and the Furious.

Speed of Information

Last night I started reading this research paper by Matt Gentzkow and Jesse Shapiro. It’s quite interesting; I’ll give you my take on it tomorrow.

I thought I was ahead of the curve by subscribing to NBER’s mailing list, but as I found out just now, Steven Levitt already knew about the paper. It reminded me of the speed of information in today’s world.

Friday, November 24, 2006

The Black-White Achievement Gap

A well-done paper from Eric Hanushek and Steven Rivkin.

Their key difference from previous papers (and therefore, the relevance of this paper) on this topic is summed as such:

We find that specific characteristics of teachers and peers previously found to have significant effects on achievement account for a sizeable portion of the growth in the achievement gap. These findings differ from those of Fryer and Levitt (2004), Murnane, Willett, Bub, and McCartney (2005) and others who do not focus on those variables for which there exist large differences by race and strong evidence that they are important determinants of achievement.

Wednesday, November 22, 2006

More on Healthcare: C-Sections

In regards to Kevin’s comment, here is the latest news on the matter. Echoing what Kevin said:

The increase comes amid a controversy over whether some women are opting for medically unnecessary C-sections out of convenience and whether some doctors are performing them out of fear of being sued.

And so, the struggle of healthcare costs continues to increase.

Friday, November 17, 2006

More on Healthcare: Angioplasty

This is exactly what Arnold Kling has been discussing for quite some time, and what his book dealt with on various levels.

The discussion is from an interview on the Newshour where Dr. Elizabeth Nabel, the director of the National Heart, Lung, and Blood Institute talks about a study recently done that shows that angioplasty performed after 12 hours of a heart attack does not improve a patients condition over standard medical treatment. Of course, before the 12 hour mark, angioplasty does make a significant difference in the patient’s condition. Also, at any point, if a patient is still experiencing chest pains or is not stable even after the 12 hour period, angioplasty is recommended.

The important thing to learn is that part of why we pay too much for healthcare can be attributed to the amount of excess in which we request for the premium procedures or medicines even when they’re not necessary.

Paying for the Name

In the latest installment of Dear Economist, Tim Harford sheds some light about the economics of wine. My conclusion, we're really paying for the name, not the taste.

Thursday, November 16, 2006

Formula 1 Technology and its Application

I brought up the topic so much in yesterday's post that it seems only fitting that the FIA and the GPMA (Grand Prix Manufacturers Association) talk about the future of technology in Formula 1, their real world applications, and how the rules might be crafted for that future.

It's a horrifically long read for anyone who was hoping for something short. However, Max Mosley and Burkhard Goschel make many interesting points, and they're in the beginning. Here's that link again.

Wednesday, November 15, 2006

The Real Question in Motor Sports

Well, Kevin Tressler has replied to discuss some of the similarities, and the more important differences in modern motor sports.

Kevin rightly states that the

…primal drive of any motorsport involves harnessing as much of man's modern automotive technology as possible to propel a car of some sort to speeds that would boggle the mind...

However, with respect to your first similarity, the difference here between NASCAR and the NHRA versus many open wheel series (e.g. Formula 1, Champ Car etc.) is that the applications of the technology is so different. That is to say that Ford, Chevrolet, Dodge, and Pontiac have almost nothing to do with technology that’s being put into those cars.

Whereas Toyota F1, BMW Sauber F1, etc. all are actual subsidiaries of their manufacturer parents. Toyota actually uses a Toyota power plant in its Formula 1 operation, and they routinely have conferences with the engineers in Japan who design and work on the engines many people drive daily. In the Mazda Star series (a minor league of American open wheel racing), they actually use the rotary engines that are found in the Mazda RX-8.

Compare that actual use of technology with the complete disconnect of the operations that are done in NASCAR and the NHRA. Do you think that John Force or Dale Earnhardt’s engines have anything to do with Ford or Chevrolet?

In your first point of similarity, you get the motive of wanting to go fast right, but each motor sport does it quite differently, and it’s the lack of actual manufacturer input that makes the NHRA and NASCAR that much more disingenuous.

You’re right again with your second similarity. As with any business, it’s about turning a profit and proliferating the brand. However, as I just stated, the NHRA and NASCAR do so disingenuously. The motto in the 60s and 70s was to win on Sunday and sell on Monday. But in today’s world, there is no reason for me to believe the Ford in the showroom has anything to do with the vehicle that competed in the race.

In contrast, look at the Speed Touring Car Challenge, or better yet the WRC. Not only are the manufacturers directly involved (like Formula 1), but these are actual cars that someone can purchase. Even in the WRC, they contain a “Group N” category that constrains anyone from making any modifications to the cars other than tires and safety equipment.

In terms of entertainment, this is how businesses in motor sport turn the profit. But let me tell you that there’s a reason why the rest of the world refers to NASCAR as “tin-top”, “taxi”, “fish bowl” racing. As much as American’s can’t understand road-course racing, the feeling is mutual from the rest of the world towards NASCAR. The venues are made for spectacular crashes. As I posted quite some time ago, its entertainment value is driven by the same arguments that preside themselves on Judge Judy.

But this is where the NHRA is far superior over the field; complete interaction with the drivers at events is unbeatable. Although, I would say that the other major series have reasons to protect their drivers from what would be a mob of fans or ill-wishers.

To your differences. The differences in format cannot be debated. In terms of performance, the numbers do speak for themselves, but I ask you about the real-world applications. And as I have posted in the past:

Essentially, it’s all about hot rods from the 50s and 60s. Meaning that, present day application is only applicable for people who like to work on their 50s and 60s hot rods.

The WRC cars continue to develop better all wheel drive technology and better chassis developments. Formula 1 has greatly improved our valve spring technology, let alone the advances in the union of computers to our vehicles.

Kevin says:

I assume you all to be intelligent human beings and you could easily research this on your own. I'm more interested in highlighting what I believe are the inherent cultural differences among the various motorsports.

Isn’t the disparity in each region’s use of technology a cultural difference?

I’ve written about women in motor sports before. And there is no argument from me on your take on women in motor sports. The NHRA has far and away been the more equal playing ground for women.

As I wrote above, you’re also right about the marketing of the drivers in the NHRA. They’re much more available to the fans.

In terms of the actual person that the NHRA attracts as a fan, the statistics don’t lie, and I only wish I could find the numbers for Formula 1 in America. And this is where I’ve been trying to lead to all along. What makes the entire world love Formula 1? And conversely, what makes America hate it so? My own thoughts on that question lend towards realizing that the US has always had always shown disdain towards many sports adored by the rest of the world (soccer, tennis, and hockey). But why? What makes Americans so different?

Cohen's Past

So, yesterday I used an article by Richard Cohen to illustrate that op-ed pieces in journalism allow a writer the liberty to speak on topics that might not be spoken upon so liberally by a staff writer.

Well, Glenn Greenwald today writes a post about Cohen and his pro-war op-ed history. However much Glenn uses Cohen as an example of how corrupt political dialogue can be (which he's right about, and Cohen did contribute to that), I think it gives that much more credence as to why Cohen's op-ed yesterday should be read. Cohen, who was so adamant about the war, now writes about how we were lied to. Just like Andrew Sullivan, people have the right to change their minds.

Tuesday, November 14, 2006

The Power of op-ed

This is partly why op-ed writers are much better known to the public.

In the article linked above - which discusses the President’s blatant mistruth on the future of now former Secretary of Defense Donald Rumsfeld - Richard Cohen ends by writing:

This is not a matter of vengeance or, God forfend, politics, but of restoring the people's faith in their government. How dare these people lie to you and me and send Americans to die in Iraq for reasons that turned out to be wholly nonexistent? One way to return to the truth is to find the liars. I ask this not for myself but -- and I mean it -- for the troops.

For someone to try and belittle this statement and Cohen’s op-ed in whole, it would take a very sycophantic mindset in favor of President Bush. I say sycophantic because even the President’s excuses – as Cohen illustrates – don’t provide adequate reasoning. In terms of the lie about Rumsfeld, I think it would have been much better if he simply stuck to the reasoning of: I lied about Rumsfeld’s future to ensure that any change in his position would not be seen as a political/campaign ploy. But the president instead lied about the lie.

And the only “reporting” I’ve seen on this is from op-ed columnists. The president spoke a blatant mistruth about the now former Secretary of Defense who has been a key facilitator to the Iraq War, how is that not news?

One reporter I like to make note of is Charlie Savage, whose reports don’t towards opinion very often, is a reporter of note who doesn’t let everything go. As Dan Froomkin (see: “Signing Statement Watch”) many times has mentioned in the past, Savage is one of the few reporters who has continuously followed up on our president’s use of signing statements. He’s not an op-ed writer, yet in terms of the president’s use of signing statements, Savage has been quite thorough in his reporting.

There is one caveat in promoting op-ed writing, and that caveat is to admit the obvious fact that many of these writers are not objective, per se (although much of that is in the eye of the beholder), and as I had realized that, I was forced to understand that it was important to read op-eds from other writers with whom I did/do not agree.

Also, as you'll note from Greg Mankiw specifically, he most often has no problem picking out other economists or politicians with whom he does not agree, and discussing the relevant topic. That is truly part of what makes an author relevant and fun to read.

Monday, November 13, 2006

Similarities and Differences in Racing

For all the debate (that even I participate in) on the differences in motor sports, it is actually quite revealing to ponder on the similarities.

To engross the similarities in one term, I would call it the “bureaucracy.” What forms all types of motor sports in bureaucracy is that these organizations operate (as well they should) as businesses. These organizational structures allow for intricate back stories that provide the real motives to many of the decisions that are done in full knowledge and behind the scenes.

As my friend Kevin mentioned in spreading this rumor on the NHRA:

…everyone knows that the minute the awards banquet ends, the crazy rumors start to fly…And surely, there's no truth to the rumor that Alan Johnson is leaving DSR (MK: Don Schumacher Racing) to wrench on Scott Kalitta's Celica FC (MK: Funny Car) next year, right?

What’s important to note here is the back-story that actually exists for Allan Johnson and his crew chief aspirations in Funny Car. Johnson is nothing if not a legendary figure as a crew chief in the Top Fuel category. But his exploits in the Funny Car have been nothing of note, except for his mere participation. Three facts need to be known. First, crew chief Alan Johnson’s Funny Car deeds are rarely ever spoken of. Second, those Funny Car efforts have amounted into very little success. And third, they’ve all been for Toyota‘s effort to gain market share in this “I hate anything that’s not American” demographic. (By the way, did I mention that Toyota had its global master plan

Alan Johnson and former active Funny Car driver, Jerry Toliver, have been key figures in trying to match Toyota to somebody’s Funny Car team.

This is no doubt (while possibly not as complicated) very similar to the stories that are played out all the time in Formula 1 with many car makers debating and talking to different teams in order to see if there is a viable chance that they can enter the Formula 1 series as engine manufacturers. Most recently, Nissan has been discussing its probabilities of entering Formula 1 and what it would take for success. Their talks have been facilitated by the fact that Nissan is in alliance with Renault (current manufacturer champion in Formula 1).

I want to ask Kevin, if he’s so smart: what are the real differences in various forms of motor sports? (Other than the fact that in drag racing you don’t turn; Formula 1 uses primarily road courses; and NASCAR uses oval racing). And I am more than willing to name some of the differences myself. So, Kevin, are you willing to participate in this discussion?

Tuesday, November 07, 2006

Myth of the Rational Voter

Well, other than the fact that today is Election Day, I’m writing this post about Bryan Caplan’s to be released book, Myth of the Rational Voter. Caplan provides a preview here.

Even Robert Samuelson has written about how we vote. Samuelson, Caplan and many other economists believe that if there are fewer voters, it is not necessarily a bad outcome. Once again, this may simply be roll off , which reflects that many potential voters don't vote because they are aware of their own lack of knowledge on many issues and/or candidates.

I recommend reading any one of the three links I’ve provided. They’ll make you think about researching to make a tough decision on who to vote for, or you’ll feel fine that by not voting you are making an honest choice as well.

Monday, November 06, 2006

Gravel Girls

This calendar is another great cause. It’s to help support the Wales Air Ambulance that many rally drivers and co-drivers depend on in Wales.

And about the gravel girls: I am glad to see so many women participating in rallying as I just wrote about the topic of women in racing earlier.

Single Fans of Formula One

First, let me state that as much as I like to cite other writes and/or bloggers who have actual credibility -- as opposed to my crazy man with a keyboard credentials -- there are times (like now) where I like to write solely based on my crazy (truthfully put, incoherent) opinions. As this article from Grand talks about, when you put the shoe on the other foot (or however that saying goes) things don’t necessarily work out better.

In order try and garner a different demographic, the promoters of this past year’s Australian Grand Prix tried to provide incentive to their female population. Unfortunately, it seems as though their incentive scheme worked about as well as it would trying to provide the average American male a more enticing reason to go to the ballet. (Other than full-on nudity, I’m not sure if you could find any other way to make guys to go to the ballet. And by the way, the men would still have to be clothed.)

Similar interests – not just interests, but hobbies – I think probably make a huge contribution to a good relationship. Now, I’m not saying this because I have sure-fire proof or personal knowledge, but rather, everyone I know has told me this.

So, I wonder if the problem lies within there being a shortage of female Formula 1 fans and a shortage of male ballet fans. I would very much love to say yes, but I’m half-way on this. I think deep down, media and culture driven gender roles inhibit what could possibly be someone’s natural tendencies to like certain sports and activities.

As much as I want to believe that there are more Danica Patrick’s and Katherine Legge’s out there, I don’t think anyone is holding their breath. Although, in terms of media and culture driven gender roles, maybe Formula 1 itself is part of the problem. No one will deny that it’s a boy’s club (even Bernie Ecclestone has issues with women in the sport). As long as there’s no impediment, if women are good enough, there’s no reason why any female shouldn’t be picked up by an F1 team. If Bernie changes his tune, then obviously the sexist tone won’t make women as fearful to take a drive in F1.

But, there are a few other things working against F1. First, pride. Pride is such a factor in Formula One that the organization would probably do a lot to shy away from women drivers because F1 would hate to be seen as doing something for purely promotional concerns (although many conspiracy theorists would argue to the counter saying that the FIA has secretly helped Ferrari in the past for media reasons). Also, almost every other form of motor sport is male-dominated, and the pool of women to choose from is quite small.

Nevertheless, I still want to thank the promoters at the Australian Grand Prix who put in the effort to create a sort of social singles scene, even if it did fail and it was only done to promote ticket sales. But who knows, maybe if one-day females have their own incentives to watch Formula One racing when women start competing in it.


My apologies to anyone who reads this blog for the lack of updates. The last week of mine has been one of the busiest. Our firm had its fiscal year end, so everyone worked together putting in their respective maximum effort.

This week I’ll try to touch on many things that have been reported and/or blogged from last week. Firstly, I’ll try and comment on a “singles” program that was done for Formula 1 this past season.

Also, while it might be late, I’ll try to comment on what every economist has been talking about for the last week on this election season…irrational voters. I’ll be re-hashing a lot of posts made by
Bryan Caplan at econlog. Caplan has posted many times that his book will be coming out sometime in the near to short term future on the “Myth of the Rational Voter.”

Lastly, I’ll be going over a
paper from Eric Hanushek and Steven Rivkin entitled “School Quality and the Black and White Achievement Gap.”

Tuesday, October 31, 2006

NBER amd Economic Indicators

I just want to make a note that if anyone is interested on keeping their finger on the pulse of the economy, to subscribe to the NBER’s New Economic Releases Feed.

Today we saw the Employment Cost Index and the Consumer Confidence Index. Both indicators gave mixed signals.

In terms of consumer confidence, the indicator was down 0.5%. The key fact to the mixed signal is that there was an increase in both the amount of people who said conditions were good and the amount of people who said conditions were bad. However, the increase in the percentage of people claiming conditions were bad was greater (1.5% for bad v. 0.8% for good).

The employment compensation index increased in the past quarter. The report itself seems to me quite ordinary, although I’ll take this opportunity to highlight one thing the report mentioned:

…the sharp increases in benefit costs seen for civilian and private industry workers over the past several years slowed to a more moderate pace.

I was thinking that this might be in some way correlated to the fact that when AETNA realized its earnings last week, that they cited “premium and fee rate increases.”

Monday, October 30, 2006

Online Arguments

Just as I have been posting about Digg in all their glory, and as I love to talk about how people comment in pretty harsh ways sometimes, this Dilbert cartoon came across me this past week…

Thursday, October 26, 2006

More on Digg

So, part of why fights happen on Digg is because of one user accusing another of “gaming the system.” Peter Abilla explains this all very well. He also links to his previous articles on Digg.

Here is his conclusion:

Digg is an economy. Votes represent demand and articles
represent a non-infinite, but exceedingly large supply of articles. Incentives are important in any economy and explain human behavior very well. Incentives can also control behavior that is less desirable, as can be found on sites like Digg and Netscape. The invisible hand on Digg is crippled — the emphasis on being democratic is misguided, since democracies have problems, as is the case with Digg; because of the problems on Digg, hence, Kevin Rose has implemented regulation in the forms of Algorithms and Policies. But, such regulatory measures, in the long run, do not work. What will work, is to use the notion of incentives to curb undesirable behavior. As a consequence, however, here might be fewer votes, but the votes will truly count. Moreover, this might be another revenue model for sites like Digg, which currently rely on an ad-based model.

Economically, this sort of paradigm may make me a communist for my support of Google News.

(A tip of my hat goes to Stephen Dubner for pointing this out.)

Wednesday, October 25, 2006

Speaking of College

In relation to my post yesterday about college education, please read this article by George Will at The Washington Post. Not that it’s a homework assignment, but as usual George Will points out another specific inefficiency in America. This time, Will focuses in on college sports; most notably football and the peculiar fact that they get tax exempt status for a significant portion of their monies even though many of the goals that they state are never really accomplished.

To illustrate his point, George Will writes:

How does the NCAA fulfill its proclaimed purpose of maintaining "the athlete as an integral part of the student body"? Only 55 percent of football players and 38 percent of basketball players at Division I-A schools graduate. The New York Times has reported that at Auburn, a perennial football power, many athletes have received "high grades from the same professor for sociology and criminology courses that required no attendance and little work." Eighteen members of the undefeated 2004 team took a combined 97 hours of those courses while at Auburn. Who believes such behavior is confined to Auburn?

I hope one day to be as excellent a commentator as George Will is, or as excellent an economist as
Greg Mankiw, but for now I’ll let them do what they do best. Also, I’d just love to see somewhat try to refute the pose that Will makes in his column. I’m not good enough to do it, plus I agree with him.

Tuesday, October 24, 2006

Paying for College

Paul Basken at Bloomberg reports that college tuition is still increasing. While I understand that the yearly increases are obvious fact to anyone, the concerning part comes from the fact that “Pell Grants, the main federal subsidy, fell by an average of $120 per student, or 4.9 percent.”

So, there are two things working against each other right now. On one side, the College Board reported that

The data reported in Education Pays 2006 document increases over time in the earnings gap between high school graduates and college graduates. In 2005, women ages 25-34 with bachelor's degrees earned 70 percent more than those with high school diplomas, and for men the difference was 63 percent. For all full-time workers in this age group, the average earnings premium for a four-year college degree is almost $14,000.

However, the increasing cost in tuition puts obvious strain on those pursuing higher education.

In my own personal experience, I have a difficult time addressing these figures from the College Board. Not because I don’t believe them, but for the reason that I (and my single working mother) tried so hard to put me through college. With hard work, we both succeeded (I got my BS Finance degree in four years, and she’s helped 3 of her children through college). I find it unfortunate that those who are willing to work hard for this achievement may be hampered from doing so, whereas another student might be making it through college completely on his parent’s dime.

Now, a real good question to my feelings on the subject is, “If it’s a free market, then why care if the student who doesn’t give a crap -- and is there because his rich guardians are putting him through takes – five years to graduate?” Well, I think that’s where my argument and worries meet their demise. You see, colleges work in different ways than regular businesses do.

That is to say, if you’re paying a lot of money for college, you’re usually paying for a more prestigious education. And if you are getting a more prestigious education, then the school you attend must also have higher standards. So, obviously you can’t fail your way through. The point that I’m trying to make is that in the end, all the people around me who bullied me and drank a whole lot of alcohol deserve to graduate because of four things: either the education and tests were painfully easy (although I can vouch that they were in fact difficult), they had the knowledge to pass the examinations, they picked a less difficult major, or they cheated.

By the way, let me tell you that at my school I remember two people who did specifically cheat. Unfortunately I can’t out them here because I don’t remember there names due to the fact that I didn’t associate myself with them. Although other than the cheating, they seemed rather harmless. Well, harmless except for the fact that their cheating may have negative consequences on the value of the degree that I and my classmates earned.

So, let’s get back on track. Question: Is the market for college strong enough in the right way to correct itself? That is to say, will the middle class and low income prospects gain more strength to go to college? Or, will colleges simply price their education so that only those with a significant sum of money can go? Right now, there’s a bit of a nice medium because the highest level of education (e.g. Harvard) also has the premium that it deserves. Nevertheless, the College Board looks at more colleges than just Harvard, and it seems that colleges that right now seem attainable in attending, may be impossible to afford in the future even if they’re education quality doesn’t change.

Monday, October 23, 2006

Lost iPod

Is this your iPod? David Berlind is doing something cool on his blog, and I’m using my blog (and the two people who read it) to help out.

If this isn't a test for how the blogosphere can get things done, I'm not sure what is. As a part of this test, if you happen to read this blog entry and you have a blog, please spread the word and let's see if the viral nature of the blogosphere can help this iPod find its owner.

If any of this means something to you and you've recently lost your iPod, contact me at The photos on this device clearly have some sentimental value. So, it would be great if we (the blogosphere) can help it find its way home. Of course, you'll need to prove to me that it's yours which shouldn't be too difficult.

Friday, October 20, 2006

The Pigou Club

I’m not sure if Greg Mankiw has made Robert Samuelson a member of the Pigou club (a club that calls for taxes on gas and other carbons to correct for all the negative externalities that these fuels cause), but I think Samuelson’s latest article allows him proper distinction to be in the club.

I’d like to think of myself in the club, but I highly doubt that “Yes, I agree” warrants enough qualification to be part of Mankiw’s list. Although, I would like to imagine that if they all got together, they’d let me in the party. The only problem is that for everyone in the group to get together, we’d use a lot of fuel.

Wednesday, October 18, 2006

No More Tag

There are too many ways to make fun of this and comment on it, but I’ll try anyway.

First, I wonder how politicians will see this. On the one hand, they’ve been more than happy to
take away certain liberties of ours for our own safety. So, I could try and say that they’d be happy in proclaiming that they’ve just made our kids safer.

But on the other hand, if you’re a glorified pundit who is homophobic, this could be a minor blow to you, or not. I mean, on one side the lack of tag and touch football might make our kids serious pansies. On the other side, as a homophobic pundit, you’d probably want to make sure that boys touch boys as little as is humanly possible (which could then be a great reason that baseball is our national pastime). In that case, getting rid of tag to that pundit would be a literal Godsend.

Also, from my memory of recess, if there wasn’t tag, there wasn’t much else to play. So, now our kids might start getting fatter. I know that might be a stretch what with playing with friends after-school and other activities, but for me – as a child – if it wasn’t for school I wouldn’t have had the exercise and activities that made school fun and kept me active physically. Also, in my experience, gym class didn’t come into effect until 6th grade.

As a kid, tag was awesome because I could only get so much soccer, and I wasn’t all that great at tennis yet. Tag filled in a great void of the need for running around for a purpose. Therefore, naturally, I would have distraught if I would not have been allowed to play tag.

How about you? Matt, did you ever play tag? I know you want to comment.

Tuesday, October 17, 2006

Even Better

In case anyone thought that people had given up on improving Wikipedia…don’t fear. According to CNET, co-founder Larry Sanger is coming out with a rival site called, Citizendium. Sanger said, said. "There are a number of problems with the system that can be solved, and by solving those we can end up with an even better massive encyclopedia."

Well, if it’s going to be even better, I can’t wait. Although, I can only imagine the kind of incentive someone would have trying to change an article (it will be much harder apparently in Citizendium) so that it can portray the truth that they wish it to.

Thursday, October 12, 2006

Did They?

I was just “wowed” last night watching a commercial. Now, if I have you wondering what cool commercial this was, I need to tell you that the commercial was not that cool. It was for the 2006 Mercury Milan; a car that itself I’m not sure is even all that “wow” worthy.

However, the song that they used for the commercial was from the band,
Morningwood. The song in particular was “The Nth Degree.” Now, thankfully, they used the right part of the song and edited the right parts because otherwise the commercial would allowed for the song to continue to spell out (if you haven’t listened to the song, to literally spell out) “M-O-R-N-I-N-G-W-O-O-D.”

Now, mind you, I personally love the song, and I really dig the band since I saw them open for Kasabian and The Music a year go. I also don’t mind the song being used in the commercial. Even if they let all the wrong words flow, I’d still be okay with it, but they’d probably have to give the commercial a PG rating, but it could still be shown with Girls Gone Wild commercials. Nevertheless, I still can’t believe they actually used the song. Now, whenever I see a Mercury Milan, I’m going to think about Morningwood, and I can’t guarantee that it will always be about the band of same name.

Another Way to Think About Dating

Tyler Cowen has another way to think about dating. From the previous comments I’ve seen here, I would venture to guess that for a few people out there, the question would be whether people want any intimacy right now and would then date many people hoping to find the right one (English Auction).

Also, as I previously saw from the commenters who called me “whiny,” to them I would then fall into the “Dutch Auction” category. According to their observations, I set the “bar” high, and then work my way down taking the first bidder that bites. While I practically have no intimacy ever, I do like not having to go through breakups.

I really have to thank Tyler for giving me (and hopefully some of you) a different way of looking at dating. I’m also sorry I didn’t come to think of it on my own.

Wednesday, October 11, 2006

A Worthy Cause

Last weekend’s Bike to the Bay Tour was brought to my attention by an old friend who participated. What a wonderful effort and a worthy cause. If you’ve been a reader of mine since the beginning then you’ll understand that I enjoy when people themselves participate for awesome causes. It’s always a wonderful reminder of how citizens can always pull together and make a significant contribution to benefit others.

And so, to my friend Mike Beris, way to go!

Tuesday, October 10, 2006

Why Not to Vote for Raj

The simple demeanor of his campaign shows how frivolous this candidate is. I’m sorry but a campaign blog that devotes two separate posts for football simply demonstrates how insincere his intentions are.

Listen to "Raj's" campaign rhetoric:

America was born through immigration, though today too much of our immigration is illegal and unchecked. Both the Democrat and Republican parties are ignoring America’s border security crisis. Republicans don’t want to anger big business and stop the flow of cheap labor, while Democrats don’t want to turn away potential voters. Astoundingly, five years after 9/11, we do not have an immigration policy to meet our security needs. More security fencing along the border and a more stringent visa policy for those coming from terrorist states are badly needed. In Congress, I will fight to see that this is done.

He doesn’t even answer the question his own rhetoric is supposed to deal with. In fact, he uses the immigration issue (which becomes an issue every even numbered year along with gay marriage and flag burning) to segue into terrorism. Not even a position, just an excuse to employ a scare tactic to try and churn up the base that votes Republican.

Even if you don’t believe me, just read
this post by Tyler Cowen in which he states:

The North Korean crisis helps the Republicans. Even the botched war in Iraq helps the Republicans. No matter how badly the Republicans do, people (rightly or wrongly) trust the Democrats with national security even less.

I think it’s time that real conservative Republicans
take back their party.

Monday, October 09, 2006


I just recently read this paper from Wesley Yin at The University of Chicago. Before I started reading Arnold Kling, my opinions on healthcare were quite stagnant. However, after many of the posts Kling makes on healthcare, I found myself interested, and my views on healthcare changing.

Yin’s paper reveals a by-product of the Orphan Drug Act (ODA); an act that was supposed to (and has) help develop drugs for rare diseases. Yin calls the unintended effect of the ODA “balkanization.” Essentially balkanization is when a drug company creates a new rare disease that is actually just a derivative of an already well-established disease.

Here’s Yin:

I find that 25-percent of all clinical trials induced by the ODA represent balkanization. While limiting off-label drug use may be impractical, reducing balkanization by imposing a fee when an orphan drug reaches a trigger level of off-label sales may be viable. Extending the moral hazard analogy, the fee or tax repayment can serve as a “co-payment” to reduce the incentives to balkanize. At the same time, co-payments also create a disincentive for firms to develop drugs for previously unconsidered alternative uses (true R&D externalities). More creative solutions may be able to limit social waste without extensive cost to innovative activity.

If you care about economics and/or healthcare, this paper might be worth your time. Or at least, just giving a couple minutes to think about “balkanization” could be worth your time.

Friday, October 06, 2006

Why we Blog

My inspiration for starting a new blog was about trying to emulate one of my new personal heroes, Greg Mankiw. Mankiw’s blog has become for me an inspiration that what I studied for so long has so many real world applications. Obviously, economics is a study of the world and the trade-offs we make in this world.

Today I took a walk back to all the time I spent becoming educated on these various topics that encompass finance and economics. I took time off from my job so I could visit a professor at the University of Delaware. On the walk to his office, I saw something that illustrated to me the unique environment that a school provides (fortunately or unfortunately depending on anyone’s personal experience).

On Main Street I saw a car parked with its hazards – or four-way flashers if you prefer – parked in a metered area. Right as the “meter maid” (in my last six years I have never seen this lady do any other sort of “police work”) was starting to give a ticket, the owner of the vehicle came rushing out, as he was ready to leave. The meter maid coerced the owner of the vehicle to stay in order so she could write the ticket out and give it to him. Now, realize, the owner was going to move the car, but was forced to wait in order to receive his ticket. But wait, there’s more. In giving the ticket, the meter maid parked her vehicle beside the vehicle getting ticketed, which if you know Main Street in Newark, DE, you realize that she double parked and blocked an entire lane of traffic. So, please someone, tell me the efficiency in that.

Why I blog, why many other people blog, and why economists like
Greg Mankiw blog I believe is an answer that can be described in the unique environments or situations that people find themselves in. For me – and possibly others – it’s a reaction to the questions that come up in our observations. And in my opinion, because universities and colleges are such unique environments, it’s no wonder that academics have so many things to blog about.

Thursday, September 28, 2006

The ExhibitioNet (Term by Robert Samuelson)

I like talking about social networking sites. I find online networking different and interesting; although the truth is that I do not participate on those social networking sites. Robert Samuelson writes:

But the ExhibitioNet is more than a marketing tool. The same impulse that inspires people to spill their guts on "Jerry Springer" or to participate in "reality TV" shows (MTV's "The Real World" and its kin) has now found a mass outlet. MySpace aims at an 18-to-34-year-old audience; many of the pages are proudly raunchy. U.S. News & World Report recently described MySpace as "Lake Wobegon gone horribly wrong: a place where all the women are fast [and] the men are hard-drinking."

Thank you Robert. In his column, he explains some of the poses that I spoke of when I posted on the topic in Blogicology. Of course in his column, Samuelson is far better researched, easy to read, and well, frankly, credible.

Two Points about Digg

I am going to try and illustrate two points in one post today with the help of this link to a politically-related article on Digg.

The comments about that article help articulate my
ongoing fear of blogging about politics. Simply put, much of the comments on that Digg page don’t really add to the political discourse. On that note, I would like to address one specific comment that stated, “Reason #234555 why you keep losing elections. You guys find the Daily Show and the Daily Kos to be a good place for talking points.”

I just have two minor disagreements with that comment. First, the real reason why Democrats lose elections (otherwise known as, “Blue States Lose”) was already stated
here (and is continuously stated every Friday might I add). Second, while using the Daily Kos and the Daily Show for “talking points” may be a bad idea (I’m not weighing in and saying that they are bad or good, just conceding the chance that this person’s comment might be right), that comment still doesn’t add to the political discourse.

I’m guessing most people on Digg might not want to and/or try to write in a different manner because they might get even more flak for a more demure writing style. I.e., “You think you’re better than us?” or “Just because you write it nicely and suggest different points of view doesn’t mean you’re right.” The bottom line is that no matter what you (or I) say and how you say it, people are going to get really angry. As I’ve found out, even when you make fun of yourself to try and illustrate how all the reading you’ve been doing is for a reason, people still find some
nasty things (go more towards the bottom) to write in order to “help you.”

My number two point in this post is to simply tell anyone who reads this blog that the reason why I link to
Google news is because I personally prefer it’s distribution of news in the sense that you don’t have to deal with a 50-50 battle royal of people yelling at the top of their lungs how the story is wrong or right.

Also, while I admit that I tried to portray a serious tone in this post, I also concede that if you’re looking for some fun, or something to chuckle at, please go and watch everyone duke it out on the comments sections of some of these Digg pages. Obviously, for the best yelling matches, I recommend these
two sections at Digg.

Wednesday, September 27, 2006

Subaru Responds

Subaru responded, and it seems as though they are completely in the clear – literally and figuratively.

Dear Mr. Katsimbris:

Thank you for visiting the Subaru web site and for your message!

The Subaru STI models do not come with window tint from the factory. We do not install a 39% window tint on this model. Only the Subaru B9 Tribeca comes with tinted windows from the factory, and only the rear windows are tinted, not the front side windows.

The STI model, like all other Subaru's. has a very light, UV reduction tint. It may have a faint blue-ish hue to it, but is not usually noticeable. If the vehicle you purchased has a 39% tint on it, it was installed at some point after the production, either by dealer or previous owner.

If you have any other questions, do not hesitate to reply to this email!

Best wishes,

(Name Withheld, although I wish they allowed me to post the name because this person had excellent etiquette)
Subaru of America, Inc.
Customer/Dealer Services Department

I then replied because I just had some further inquiries in his email, but nevertheless, Subaru is in the clear, and with the help of my dealer, so will be my car's windows.

Rock on Subaru.

Tuesday, September 26, 2006

An Open Letter to Subaru

Greetings, I am the owner of a 2005 Impreza WRX STI. I would like to ask a few questions. First, am I correct in assuming that many of your vehicles (including a 2005 STI) come from the factory with tint on all windows – except the windshield?

Second, as I purchased the vehicle pre-owned (it was a lease turn-in), I had to go to the DMV to have a VIN check performed where they made me take it through inspection knowing that they could fail me for the window tint (apparently, even though only for a VIN check, they have the right to inspect vehicles on call if they’re in the lane). 70% light is required to go through the windows (Delaware State Law) and the Subaru’s tint only allowed 39%. What is Subaru’s official statement on their use of window tint in vehicles? Is there any comment on this situation (or prior similar situations)?

Please know that I am in no way mad at
Subaru, or my dealer. Both my vehicle and Matt Slap Subaru are excellent, however I believe I am deserving of some official statement in what is an apparent incongruence between Delaware State Law and one specific manufacturing standard (window tint) of Subaru.

Monday, September 25, 2006

Dana Garrett Comes Through

In the past month and a half that I’ve been reading Dana Garrett, I’ve found someone that really gets the point, and Dana does it again. I was hoping he’d lay out a little more about Dennis Spivack, and thankfully, he’s doing just that.

In politics, transparency is paramount, and it’s up to media outlets (no matter what type) to provide the information that people need to be aware of.

The Penny

Sebastian Mallaby reminded me about the cost of the penny today (my disdain towards carrying cash leads me to not having to see pennies very often).

You can look for yourself as to what tons of people are saying on the topic by
searching “zinc lobby” in Google.

Even though Greg Mankiw is blogging with more purpose these days considering that the attention of his class is somewhat drawn to his blog, a caveat to the academic year starting is that we might not get as many of
these posts from Greg.

Here is Steven Levitt and Stephen Dubner on the topic. If anyone can provide a link for me to a good argument for keeping the penny, leave it in the comments.

UPDATE: Hey, I think Greg subscribes to Sebastian Mallaby too.

Sunday, September 24, 2006

More on Comments

I always talk about commenting. And this time, Greg Mankiw has something to add to the table.

Friday, September 22, 2006

Nice Catch

In case anyone thought that I didn’t notice, I did see Tyler Cowen link to a paper that I have talked about previously.

Whatever happens, don’t tell Tyler that I wrote about the paper first, the man has a reputation to uphold.

Wednesday, September 20, 2006

Anxiety and Personal Economics

I admittedly get anxious quite easily over any presumed personal threat, whether it comes through a death threat or the simple ill-wishes from another person.

Nevertheless, I realized the other day that if I think about this economically, than many of the decisions I make are making me better off. How, by eliminating my costs (otherwise known as my “worries”). Now, for many people, the personal cost (disutility) of worries is quite insignificant. But for me, I worry a lot.

I’ve seen bloggers get nuts at each other over differences in political ideology. And I’m not just talking about, “Gee Robert Novak, you really can be a pompous douche.” I’m talking about the times when some bloggers call other people “friends of terrorists” or “enemies of America.” So, needless to say, I’m so anxious that even though the internet is the place to be when you want to say and advocate crazy agendas, I would like to never get engulfed in one of those blog to blog arguments.

There is a caveat to the blog v. blog dynamic though. In terms of economics, it can lead to some great debate. Although in politics, I’ve seen it turn to gut-wrenching slander (especially when you read comments of those people who disagree).

Nevertheless, let me show you the trade-offs I make on a daily basis that I hope will make everyone out there realize that they actually make tiny economist decisions everyday.

  • Firstly, my car. Bad accidents, random acts of hate (I’ve seen it happen to a girl I knew in college who had NO ENEMIES), and a general public disregard for other people’s property (i.e. dings and dents from people who don’t care about their car, and therefore don’t care if their car and their actions inflict damage onto yours).

    Yet, I still chose to buy, keep, and maintain a really cool car in my opinion. Why? Well, this is where being an economist is blurred because the decision is quite irrational. I like the car because I’m such a fan of racing and the discipline behind
    Formula 1 and the World Rally Championship. It takes a lot of effort to obey the rules and keep all the vehicles in prim and proper condition. It’s just cool to me.

    So, even though this is completely irrational, the personal utility to me for keeping the car and being a fan greatly outweighs the risk of having something bad happen. I also take precautions on my vehicle, and divest my own personal time to maintaining the vehicle.
  • Second, being in public. Now, I know that Social Anxiety Disorders are real, but I do believe that some of the feelings that I go through are related to my horrible experiences in high school. However, going to the grocery store, going to work, or just taking a day off and going to the mall or to the beach provide me with more than enough incentive to engage in some activities that I see some amount of risk in.

Now I know that my two examples are extreme and borderline crazy, but they’re the simplest forms of personal economics that we all practice everyday. We deal with our personal marginal costs and marginal utilities all the time. I'm just glad I don't have an Obsessive Compulsive Disorder; talk about a whole new line of costs.

Friday, September 15, 2006

The Dangers of Political Blogging

Blogging about politics is dangerous. Anger comes out left and right from the blogosphere from almost any topic imaginable. This is why I link to Glenn Greenwald as often as I do. Here’s someone who uses facts and precedent all the time, and yet still gets grilled.

Nevertheless, in
Delaware Watch, Dana Garrett’s post about Dennis Spivack left me, well, wanting more.

I hope (rather, can't wait) to see Dana write about Dennis Spivack's anger with more detail. By simply telling me that he's angry without citing specific examples, I'm not sure how to gauge Spivack's "anger."

I also can't wait to hear some details because I'm just not completely sold on me not voting for a candidate because they are angry or because they might cause embarrassment for Delaware. (What’s really unfortunate is that my out-of-state friends from the University of Delaware say that the most embarrassing thing about Delaware is…Delaware.)

Also, in terms of embarrassment, why not talk about
Senator Biden’s plagiarism? Why still allow him to be re-elected every term?

By that logic people might as well not vote on platform grounds. And in fact, that logic would make me wonder how people voted for George W Bush at all.

One other item that sticks in my crawl about political blogging is that I don’t think the people who need to be reached are being reached. If Dennis Spivack is embarrassing and is a horrible mistake, then what about
Alaska’s Ted Stevens (“The internet is not a dump truck…it’s a series of tubes”)? With Ted Stevens, we have a man who is both angry and ignorant.

Delaware produces a dangerous dichotomy on its own, that blogging apparently hasn’t brought to the surface. Delaware’s wonderful comfort for businesses to incorporate here brings in a tremendous upper echelon Wilmington area complete with its own socio-economics divisions. But further south, Delaware becomes even more divisive from rural farm landscape to a developing beach shore environment. I reside in between the rural area and the shore, and I can tell you that Dana and his messages aren’t getting down here.

I think reaching only one part of an audience that can vote to make a difference could end up being dangerous. There is a caveat though, those most interested in political discourse and change will apply their searches to the internet and find
Dana. So, the danger doesn’t really lie in Garrett’s reaching only one part of the whole, but rather the unfortunate fact that the rest of the whole doesn’t want anything to do with politics.