My Kind of Superhero

Incredibly cogent and compelling, Steve Wynn, CEO of Wynn Resorts in Las Vegas, serves up a brilliant riposte to the economic know-nothing governor of Michigan:



Mr. Wynn reminds me of my favorite superhero of 2009, Rorschach from the comic-turned-movie Watchmen:

Rorschach was the guy who had no qualms with doing whatever it took to uphold justice. He was no moderate, to say the least.

Inequality is a Great Thing

Don Boudreaux over at Cafe Hayek makes an excellent point about income inequality:

If some persons are robbed of their property or are unfairly blocked from pursuing economic opportunities, that’s wrong and should be stopped. If some persons are so poor that they lack life’s barest necessities, they should be helped. (How best to help them is a different issue.) But neither of these problems has anything to do with income inequality. We would want to correct these problems even if doing so would make the income distribution more unequal.

He's exactly right that when a man should be helped is a separate issue from how he should be helped. 'Income equality' is a ruse (for many people, not all), because the desire to help those without basic amenities would still exist even within an egalitarian society. The whole notion of 'income equality' is an attempt to divorce cause from effect, the production of wealth from the earning of wealth.

I want to somehow incorporate the notion of the 'distribution of knowledge' in society, and how income inequality reflects it. But I'm not sure I can make it pithy enough.

Total income equality implies that all services in society are valued quantitatively, relative to money, the same by everybody. That means that water production, diamond production, Yuengling production, education, fine food, fast food, and on down the line, all of it is valued equally by everybody, thus rendering all producers of a product with equal incomes. This is obviously absurd because if I valued everything equally I wouldn't have much of any one thing to enjoy, because my income would be stretched so incredibly thin. If you could somehow partition people to value whole blocks of specific amenities all by themselves, so that they'll get greater amounts of homogeneous valuables, this would still be contradicted by the fact that all people still need water and food (thus ruining a partition scheme), and this demonstrates that some items will by the nature of being human be valued to a greater extent than other items.

In this way, income inequality reflects the vast unequal preferences of each and every member of society.

To deny this would consequently deny ourselves from enjoying our respectively unequal preferences.

Count your IQ, Instead

Mother Jones -- Good news for haters of the nanny state: New York City's new law requiring calorie counts on chain restaurant menu boards doesn't appear to be making any difference. In fact, it might be causing people to eat more.

The results were pretty dismal: only about half the respondents even noticed the calorie counts and only 15% said they influenced their choice. But the receipts told an even more dismal story: overall, people actually purchased more calories after the law went into effect.

The second time I went to NY is the time I really despised it, in no small part due to fast-food calorie counts by every item required by its legislators. I assumed it to be damaging in the long run to smaller businesses that can't afford such requirements, and either way, its subtly-fashioned tyranny at its best. More so, I figured it wouldn't do any good because we already have calorie counts on the back of chip bags and cereal boxes in the super market, and if you haven't noticed lately, chips have their own aisle, as well as soda. Obviously, people don't care about calories as much as the satraps in Washington would like them to.

Anyway, this post killed two birds, in that it relates to my last post about condoms. Though not statistically significant, the results of this study found that consumption actually increased. Who'da thought? Now, because of the absence of statistical significance, I wouldn't go around saying it's a done deal, but just like the condom issue, we cannot a priori assume that what we do, even in totally fiat ways, will get the job done. In fact, we'll often find that government fiat actually encouraged the opposite kinds of behavior!

Now, will the bureaucrats running NY pull the calorie requirement off the table? Ask me if I like public schools, instead. This runs with my theory (which I can't really call it mine because I know other people have written about it [Hayek, but I did pioneer my brain into it before I read Hayek]) that governments have extremely poor feedback mechanisms. Hot issues take center stage often just one time, and no matter what the effects specific legislation actually procured after-the-fact, we are more often than not stuck with it.

'Condoms' in Society, Not 'Knowledge'

Though my interests lie mainly with political economy, I do have those nerdy economic thoughts popping into my head from time to time. Now, I'm sure research has been done on what I'm about to propose, but either way, I know of no research.

Let's assume that condoms encourage more sex in society, because the use of condoms decreases the odds that one will knock somebody up or come down with the bug, which people consider bad, and generally seek to avoid these conditions. This may or may not be an accurate assumption, for one could counter that people are going to have sex just as much, with or without protection. True as that might be, it is an empirical question that I won't consider here.

Now, because people have more sex because of the existence of condoms, can we a priori say that societies using condoms will have lower incidences of STD contractions and unwanted pregnancies?

I think not.

Consider that a) condoms break, b) condoms possess a small margin of error without breaking, i.e., they don't prevent STDs and unwanted pregnancies sometimes, albeit a very small percentage of the time.

It comes down to an empirical question about the society at hand. Do the members of a particular society have so much more extra sex as to make the 'small percentage of the time' quite large in absolute numbers? That is, does the presence of condoms actually increase the frequency of STD contractions and unwanted pregnancies?

There are idiosyncratic situations that may or may not be considered significant, such as the scenario of the guy who thought he had a condom in his wallet, but found out he was wrong when it came to go-time, and said, "Screw it."(pun intended) This certainly does happen, but does it happen frequently relative to being right about having a condom?

Taking a guess, I would say that the presence of condoms in society generally gets the job done, considering the population growth of 3rd vs. 1st world countries, blaze blaze. But this issue isn't why I pose the question.

Instead, I'm questioning automatic assumptions that people have, regardless of having any evidence to support what they believe. Indeed, I've never looked into the effects that condoms have on societies, but I've always carried the notion that they generally decrease the rate of unwanted pregnancies and disease.

This is kind of like how people automatically assume that the government can do what it sets out to do, with the right satraps. Or, that industrialization or Splenda is inherently pernicious to human health. These two, in my opinion, are the easy fallacies to catch. But what other assumptions do we carry that are totally false? Is this phenomenon prevalent?

Alright, OK, what I'm really asking is, What assumptions do I carry that are totally false?

This question has been asked in many different forms, and it is often what economic research is all about. I don't think there is any uniform answer. But it is food for thought.

Took the GRE

What a joke. I say it because I took multiple practice tests and at one point I earned a 790 (math), and at another I missed half of the test (don't know the score equivalent). On the real deal, I earned a 750 (math) and a 590 (verbal). But I could just as easily have earned lower on both (or higher), considering that I was nervous as hell and hated the whole process.

It's funny how graduate schools have you take a test that doesn't reflect anything you've learned during your undergrad years. I understand that it's one measure of many that admissions folks look at, but sheesh. I hated the whole thing.

Totally didn't study for the verbal, with the exception of vocabulary flashcards. I figured, "I know english, and I know big words, so I will do well!" Wrong. But I also knew that GMU and NYU econ programs don't look too much at the verbal.

I wonder if you can retake the GRE piecewise? That'd be great, but I doubt it. It's meant to be an enduring (3 hour) process for a reason, I suppose.

All in all, a valuable lesson learned in what is my first step into the inanity that is graduate school.

My Thesis

AP -- With [increased] demand, [bullet] prices have also risen.

"Used to be gold, but now lead is the most expensive metal," said Donald Richards, 37, who was stocking up at the Jefferson store.

Actually, no, not at all. But I did discover something interesting:

It takes lead to make bullets, for sure, and the price of lead did increase right around the presidential debates, where McCain was at his prime idiocy. No, really, what a mooncalf. I suppose I could compare lead's price activity relative to all other industrial commodities' prices around that time, maybe I'd be on to something!

But seriously, we do see a jump in Oct. '08 and Jan. '09. I wonder how much of the lead market firearms and ammunition take up.

Something's not right.

AP -- Bullet-makers are working around the clock, seven days a week, and still can't keep up with the nation's demand for ammunition.

Shooting ranges, gun dealers and bullet manufacturers say they have never seen such shortages. Bullets, especially for handguns, have been scarce for months because gun enthusiasts are stocking up on ammo, in part because they fear President Barack Obama and the Democratic-controlled Congress will pass antigun legislation...

Demand has been so heavy at some Walmarts, a limit was imposed on the amount of ammo customers can buy. The cutoff varies according to caliber and store location, but sometimes as little as one box — or 50 bullets — is allowed...

At Jefferson Gun Outlet and Range in Metairie just west of New Orleans, owner Mike Mayer is worried individuals are going to start buying by the case.

"If someone wants to shoot on the weekend you have to worry about having the ammunition for them. And I know some people aren't buying to use it at the range, they're taking it home and hoarding it." [Emphasis mine]

Interesting, I'm guessing the managers at a place like Wal-Mart aren't allowed to ad hoc raise prices during times of high demand. Kind of neat, in that smaller businesses are able to better provide in times of turbulent demand. But this is merely a conjecture. Although, it seems as though Wal-Mart of all places would be savvy enough with their merchandise to raise prices in a timely manner, as opposed to limiting purchases (and thus limiting their own profit potential). I wonder if the government is somehow involved in the bullet business? Wouldn't surprise me at all.

I added the last two lines simply to say "What the hell?" What business is it of Mike Mayer's to be concerned with what the hell people do with the products they purchase from him? He uses the word "hoarding" as a pejorative, like storing bullets for rainy days is stupid. If that's his stance, he needs to clear out his bank account, sell his investments, throw all the canned goods in his pantry away, and donate any clothes he hasn't worn in the past 3 days to the local Good Will. We can't go halfway when it comes to hoarding, sir.

Sheesh, Mr. Mayer sounds like a Keynesian!