Economics and Alaska

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Instant runoff voting - pro and con

What is instant runoff voting?

From the faq of the Center for Voting and Democracy - advocates of the procedure:

"Voters rank candidates in order of choice: 1, 2, 3 and so on. It takes a majority to win. If anyone receives a majority of the first choice votes, that candidate is elected. If not, the last place candidate is defeated, just as in a runoff election, and all ballots are counted again, but this time each ballot cast for the defeated candidate counts for the next choice candidate listed on the ballot. The process of eliminating the last place candidate and recounting the ballots continues until one candidate receives a majority of the vote. With modern voting equipment, all of the counting and recounting takes place rapidly and automatically."

Why would we want to do this?

The Center for Voting and Democracy provides the following talking points - here. Much more information is available at their site here: "Instant Runoff Voting (IRV)".

Who could be against this?

Iain Murray is opposed to this procedure. See his November 28 article in USA Today: "Consider democratic ideals"
posted by Ben Muse at 10:09 AM

 
John Rawls

John Rawls, Harvard philospher, died last Sunday. Here are some more memorial posts (to supplement the list I posted on 11-25):

• Jacob Levy's blog - "John Rawls died yesterday at age 81"


• "Kieran Healy's blog - "Scribble, Scribble, Scribble"


• "Kieran Healy's blog - "The Network of Ideas"


• Chris Bertram's blog - a second note - "More Rawls obituaries"

Rawls has been a minor figure in the public economics classes I've taken and taught. His critique of the ethics underlying mainstream welfare economics is normally a side-item. The posts I've been reading make clear that there was much more to his work, and that he had a very important place in modern political philosophy and ethics. Jacob Levy writes, in his weblog,

"...Within Anglo-American philosophy it [Rawls' work - Ben] renewed the sense that it was possible to engage in rigorous, serious, meaningful debate about moral and political questions. And it serves to this day as the most influential, most important critique of both aggregative-utilitarian substitutes for a theory of justice and radically-egalitarian versions of such a theory. He was, in addition, a famously effective teacher who shaped two generations of Harvard philosophers, and a gracious gentleman who sought conversation and shared intellectual progress."

posted by Ben Muse at 4:15 PM

 
The Pilgrims and the "tragedy of the commons"

Caroline Baum, at Bloomberg.com, has an economic lesson for Thanksgiving: "The Economic Story of Thanksgiving ". (Next month: "The Deadweight Loss of Christmas" (by Joel Waldfogel, American Economic Review, 1993).)

I learned about Baum's column at the weblog of Mindles K. Dreck. Let me also refer you to Mindle's posting on what really passed between the Pilgrims and the Massachusetts Indians: "A Thanksgiving Toast: To Accurate History and Inspiring Myth". Mindle doesn't think Thanksgiving is based in 17th Century history, asks if it really matters:

"It is a myth or "sacred history" that recasts our origins into an inspirational guidepost for the future. It is a story told to represent an ideal America in which cultures exchange to mutual benefit. It speaks of refugees from religious oppression bravely striking out to a new land and joining together with the vastly different native Americans to thank God for the tremendous bounty of what is now our United States. It is about the common pursuit of happiness. As Loewen points out, some textbooks need to define it as myth more clearly. It isn't a historical record, but it is historical in the sense that it describes Twentieth Century American ideals."

Elizabeth Armstrong sorts out fact from myth in this Christian Science Monitor story: "The first Thanksgiving". There is not much to go on about, however,

"In a letter to a friend, dated December 1621, Edward Winslow wrote: "Our harvest being gotten in, our Governor sent four men on fowling, that so we might after a more special manner rejoice together, after we had gathered the fruit of our labors; they four in one day killed as much fowl as, with a little help beside, served the Company almost a week, at which time, among other Recreations, we exercised our Arms, many of the Indians coming amongst us, and among the rest their greatest King Massasoit, with some 90 men, whom for three days we entertained and feasted and they went out and killed five Deer, which they brought to the Plantation and bestowed on our Governor, and upon the Captain and others.""

posted by Ben Muse at 10:30 AM

 
Administration land policy plans

The Twin Falls, Idaho, Agweekly online reports on a visit by Interior Department officials to the Idaho Cattle Association's annual convention. The story suggests the range of changes the Department is considering, including changes to the regulations promulgated under the Taylor Grazing Act, the National Environmental Protection Act (NEPA), and the Endangered Species Act.

"Answering concern over the slow pace at which changes are coming, considering Bush has been in office two years already...

"'It takes awhile to turn the ship," he added, "but we now do have a window of opportunity -- in which we need to move.'"

The story, by Carol Ryan Dumas, is here: "Change in land policy imminent"
posted by Ben Muse at 9:31 PM

 
Why are forest fires worse?

Good article in the Ventura County Star surveying theories about the increasing severity of forest fires: "Dispute rages over increase of wildfires in West".

Is it due to fire suppression over the last century?

"It has become a popular conception that professional firefighting efforts over the past century have prevented natural fires from periodically clearing away dead underbrush and small trees. This suppression, the theory suggests, has allowed a buildup of fuel to the point where even natural fires -- which in the past would have crept harmlessly through the understory -- quickly explode into all-consuming infernos, leaping from tree crown to tree crown in a cyclone of flames that veteran firefighters wryly suggest can be fought only one way: Pray for rain and run like hell."

Is it due to logging over the last century?

"For the most part, the gigantic wildfires of the first half of the 20th century occurred precisely in those areas where logging had been most active: Logging meant roads, which allowed greater forest access for hunters and others prone to accidentally or intentionally set fires, and provided vast quantities of ready fuel in the form of discarded branches and other woody debris."

Are forest fires even worse?

"Curiously, for all the high-volume angst among politicians over the terrible cost of this year's fire season -- and the haste of some to blame the devastation on impediments to logging and forest thinning -- historical data suggest the problem is no worse now than in the past. Since 1960, according to the Interagency Fire Center, total acreage burned has equaled or exceeded this year's figure four times: 1963 (7.1 million acres), 1969 (6.7 million), 1988 (7.4 million) and 1996 (6.7 million)."

Is it because more people live among the trees?

"The West is the fastest-growing region of the United States, and according to the Federal Emergency Management Administration, 38 percent of new homes built in the region today are in or adjacent to the "wildland-urban interface."

I learned about this from the web site of the Forest Service Employees for Environmental Ethics. A good source of land management news stories from across the country.
posted by Ben Muse at 9:23 PM

 
Forest Planning Regs Proposed

The Forest Service proposed new regulations today to govern land use planning in the national forests under the 1974 National Forest Management Act. If adopted, this will be the fourth set of regulations proposed under this act (the others came in 1979, 1982, and 2000). All sides seem to agree that these rules will streamline the planning process compared to the 2000 Clinton rule - not everyone thinks this is a good idea. The proposed regulations may be found here: Ecosystem Management Coordination.

Robert Pear has a story in New York Times here: "Bush Plan Gives More Discretion to Forest Managers on Logging (free registration required).

"The proposal applies to 192 million acres of public lands in 155 national forests and 20 grasslands in 44 states. The forests include Tongass, in Alaska, with snow-capped mountains and streams filled with salmon; the Sequoia forest in California, where ancient trees tower over visitors; Gallatin, in Montana, one of the last refuges for grizzly bears and wolves in the lower 48 states; and the White Mountain National Forest, in New Hampshire and Maine, which has 1,200 miles of hiking trails.

"For each national forest, the government prepares a formal plan, similar to a zoning ordinance. The plan identifies areas suitable for recreation, grazing and timber harvesting and specifies what must be done to protect rare species, prevent floods and reduce wildfire hazards.

"Under the rules issued by the Clinton administration, the government must assess the effects on the environment whenever it revises a forest plan. The proposed rules would not require such assessments."

Mike Allen has a story in the Washington Post here: "Bush to Shorten Forest Environmental Reviews"

"The proposed regulations, which closely track recommendations by the timber industry, would reduce the number of scientific and environmental reviews required when 15-year master plans are developed for the 192 million acres of the nation's 155 national forests. The plans, similar to a zoning process, specify where recreation, mining and other development can take place.

"The proposal, overturning regulations issued by President Bill Clinton two months before he left office, would give local forest managers more leeway in complying with a 1976 law mandating the preservation of diverse plant and animal species. The rule, now open for public comment, will not take effect for at least nine months.

"Administration officials say the change is needed to speed up an overly burdensome, time-consuming process in which it is too difficult to make justified changes in national forest policies. Environmentalists say the proposal will eliminate important safeguards against unwise policy changes -- and invariably lead to more mining, drilling and logging in forests -- by reducing the number of scientific reports and the opportunity for public comment."

posted by Ben Muse at 9:03 PM

 
The Economics of War With Iraq

Two articles:

A short one from the Washington Post: Robert Samuelson column - "Figuring the Costs of War".

A long one from the New York Review of Books (cited by Samuelson): William Nordhaus - "Iraq: The Economic Consequences of War". A longer version of the Nordhaus study (to be published by the American Academy of Arts and Sciences can be found here: "The Economic Consequences of a War with Iraq". Nordhaus draws on a Congressional Budget Office (CBO) study, "Estimated Costs of a Potential Conflict with Iraq," available from the CBO web site here: Congressional Budget Office.

Another one from Slate: Robert Shapiro - "The Cost of Toppling Saddam. Will an Iraq war hurt the economy?".

This article in the Economist reports on a study released this week by the Centre for Strategic and International Studies and also mentions the Nordhaus analysis. "Calculating the consequences".

The Centre for Strategic and International Studies study was connected with a day-long workshop on the economic consequences of a war held by the Centre on November 12. Various conference related papers may be found here: Centre home page.

The New York Review of Books home page: The New York Review of Books.
posted by Ben Muse at 12:21 PM

 
Who's going to get the disaster relief?

The Federal Emergency Management Agency (FEMA) is a political agency. Do presidents and congressmen use it as a giant slush fund to advance their political objectives? Not entirely, say Thomas Garrett and Russel S. Sobel in a recent Federal Reserve Bank of St. Louis working paper, "The Political Economy of FEMA Disaster Payments."

What is FEMA

FEMA is the federal government's disaster relief agency:

"...After a disaster strikes a particular area, the governor makes a request to the president for disaster assistance. After receiving a governor's request, the president then decides whether or not to declare the state or region a disaster area. Only after a disaster has been declared by the president can disaster relief be given. FEMA is in charge of determining the level of relief funding for the area, but further appropriations are determined by Congress in cases requiring large amounts of funding beyond FEMA's allocated budget...

"On average, FEMA provides annual relief expenditures of about $3 billion for about 50 declared disasters each year. Relief varies greatly from year to year, however, and hit a high in 1994 when FEMA disaster expenditures exceeded $8 billion...

"The vast majority of FEMA operations and expenditures are undertaken under the rules and processes established by the Robert T. Stafford Disaster Relief and Emergency Assistance Act..., hereafter referred to as the Stafford Act. This act establishes the process for requesting a Presidential disaster declaration, defines the types of relief that are available for relief expenditures, and also the conditions for obtaining assistance."

What did Garrett and Sobel do?

They collected data on FEMA disbursements by state for the years 1991 to 1999 and combined it with information on the scale of disasters by state, other state characteristics, and information about state politics. They then did two statistical analyses, one to determine the rate of presidential disaster declarations, and one to determine the level of federal disaster disbursements by state.

What did they find?

• The rate of disaster declaration is greater in states with greater electoral importance (which increases with the number of electoral votes and the historical equality of party prospects in the state).


• The rate of disaster declaration is greater in presidential election years.


• States that have more congressmen sitting on FEMA oversight committees received more FEMA disaster relief.


• For each additional congressman on a House FEMA oversight committee, a state received an average of $31 million additional disaster expenditures.


• "Of all FEMA disaster relief provided over the sample period, our models suggest that nearly half of this total is due to political influences rather than by need."


• They did not find that states with a governor of the president's party had a higher rate of disaster declarations, or that the rate was affected by the percent of the state's congressmen or senators of the president's party.

What does it mean? (P.S. 11-27-02)There is a certain amount of money to allocate among disaster victims and it has to be allocated on some basis. Congress has apparently made the formal criteria very vauge. People who are politically connected (or have a high marginal political value - as noted, states whose electoral votes are a toss-up appear to do better) have an advantage in the competition for disaster relief. To some extent the funds are allocated to advance the personal objectives of the president and the congressmen on oversight committees. I'm not sure what it means to say half the money is allocated on the basis of politics rather than need. I don't recall reading anything that suggested to me that the people receiving the money were not victims of disasters. That said, it sounds like people may not be getting relief in proportion to their suffering.

I think I remember reading another article on government fund allocation - this dealt with the allocation of funds among endangered species, arguing that, when criteria were vauge, the allocation of these disbursements reflected the preferences of the people who made the disbursements rather than more scientific criteria. I'll try and find the source for this.

The Washington Post is worrying today about the allocation of foreign aid under the administration's new aid initiative:

"As well as being distorted by foreign policy considerations, traditional aid has been captured by U.S. domestic lobbies that deliver food, medical supplies or other aid under contract. The U.S. Agency for International Development's Web site has boasted, scandalously, that close to 80 percent of its contracts and grants goes directly to American firms."

Source: Garrett, Thomas A. and Russell S. Sobel. "The Political Economy of FEMA Disaster Payments." Working Paper 2002-012B. Federal Reserve Bank of S. Louis. 2002. Available at http://research.stlouisfed.org/wp/2002/2002-012.pdf. Last accessed on Nov. 26, 2002.
posted by Ben Muse at 8:09 PM

 
Julius Caesar's blog

"Bloggus Caesari"

I learned about this at the blog of Brad Delong.
posted by Ben Muse at 7:26 PM

 
I assume the original title for this was "Hu's on first?"

"Secret Transcript, Not For Dissemination".

I learned about this at the blog of William Burton.
posted by Ben Muse at 7:08 PM

 
Tariff reform

The U.S. has proposed that the world's countries on all industrial and consumer goods by 2015. The Economist reports tonight "Can America kickstart the Doha round?".

"AMERICAN presidents like to think big, and George Bush is no exception. Mr Bush has now given his backing to a new proposal which would mean the abolition of all tariffs on industrial and consumer goods by 2015. And by all tariffs Mr Bush means all—not just in America, but around the world. The aim is to inject new life into the Doha round of world trade negotiations. The World Trade Organisation’s (WTO) director-general, Supachai Panitchpakdi, said on November 25th that slow progress was putting the talks at risk.

"Yet the boldness of the latest proposal, which follows an equally ambitious American plan to eliminate agricultural export subsidies, is enough to make many of America’s closest industrial partners pale. America is not proposing unilateral reductions, after all—the commitment to reduce and then abolish tariffs involves all 144 WTO members. And developing countries, whose tariffs tend to be much higher than those of rich countries, and which would therefore have to make much bigger tariff reductions, are more likely to see America’s plan as brazen hypocrisy on Mr Bush’s part."

Related links:

• Brink Lindsey: "Imagine no tariffs" (brief analysis of today's announcement)
• Brad DeLong: "More Incisive Analysis From the Economic Policy Institute! " (imported goods are not a bad thing)
• Bastiat: "A Petition From the Manufacturers of Candles, Tapers, Lanterns, Candlesticks, Street Lamps, Snuffers, and Extinguishers, and from the Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting." (a famous and entertaining critique of trade barriers and tariffs)

posted by Ben Muse at 7:06 PM

 
Development and environmental goals collide in Asia

Alan Boyd reports on the severe environmental problems associated with economic growth in Asia in the Asia Times: "Environmental cost of Asia's Development".

"Neglect of the environment is costing Asian economies as much as 8 percent of national growth, and the extent of degradation is accelerating, the Asian Development Bank (ADB) has warned in its latest regional assessment.

"River systems contain four times as much pollution as the global average, while lead emissions are above safe proportions in most large cities. Per capita forest cover is 65 percent below world standards, and falling fast. "Environmental degradation in the region is now pervasive, accelerating and largely unabated," the bank stated, adding that "resources that underpin long-term economic development are at risk"...

posted by Ben Muse at 8:45 AM

 
New Source Review

Paul Krugman writes about the Administration's change, last week, in the Clean Air Act's new source review rules: "Every Breath You Take". (New York Times, November 26, 2002, free registration may be required).
posted by Ben Muse at 10:57 PM

 
Bush Administration Foreign Aid Initiative

Last March the Administration proposed a program of foreign aid dispersal designed to direct money towards countries adopting plausible development policies: the Millennium Challenge Account. Now the administration has proposed lodging fund administration in a new agency - deliberately separated from the State Department to reduce expenditure pressure based on political considerations. See Tuesday's Washington Post: "Bush to Call for New Foreign Aid Agency".

"The fund, dubbed the Millennium Challenge Account, was proposed by President Bush in March, with the first disbursements scheduled for the fiscal year starting next October and annual funding rising to $5 billion a year by 2006. U.S. foreign aid currently totals about $10 billion a year; that funding, much of which goes to strategically important countries such as Pakistan and Egypt, would continue.

"By choosing to create a stand-alone Millennium Challenge Corp., the White House rejected other options, including putting the fund under the State Department or under AID. Secretary of State Colin L. Powell pushed hard for keeping the fund under his purview, according to sources familiar with the debate, but a compromise was reached in which he will chair a board consisting of other Cabinet-level officials who will make the final recommendations to the president about the countries to receive funding."

There's also an article in Tuesday's New York Times: "Bush Plan Ties Foreign Aid to Free Market and Civic Rule" (may require free registration):

"The administration's concept is simple: Countries with a demonstrated commitment to the rule of law and predictable and sound fiscal policy have the best chance of attracting private investors. The foreign aid grants would essentially amount to seed money, and Mr. Bush's aides said today that it might be given to nongovernmental organizations in some countries, rather than just to the central government."

The Washigton Post thinks the Bush initiative is a good one, but has some reservations ("Rethinking Foreign Aid"):

"This new selectivity has its critics. Some worry that the aid would go to successful countries that don't need the help. But the administration promises to target countries whose per capita annual incomes are less than $1,445, and analysis by the Center for Global Development in Washington suggests that at least 20 countries below that level could pass the good-governance test. Other critics worry that misery in badly run countries would be neglected. This is a risk, but the hard fact is that aid in such settings may be wasted. With luck, backing countries with good policies may create an incentive for countries with bad policies to change their ways.

"The real worry with the administration's thinking is that its break with past aid policies may not be radical enough. As well as being distorted by foreign policy considerations, traditional aid has been captured by U.S. domestic lobbies that deliver food, medical supplies or other aid under contract. The U.S. Agency for International Development's Web site has boasted, scandalously, that close to 80 percent of its contracts and grants goes directly to American firms. If the Bush administration is serious about wanting to make aid effective, it must free poor countries to spend aid dollars on the most efficient suppliers -- including suppliers who themselves come from poor countries. It must also avoid burdening aid recipients with onerous conditions and reporting requirements; the well-governed countries eligible to receive the new dollars are by definition capable of spending the aid responsibly."

posted by Ben Muse at 10:16 PM

 
Why its worthwhile studying Lyndon Johnson

Robert Caro has won the National Book Award for Master of the Senate, the third volume of his Lyndon Johnson biography, covering Johnson's career in the U.S. Senate. Why is Johnson worth the time? Caro is quoted:

"I consider each of my four books studies on political power, how it is acquired and how it is used," he said. "If you care about political power, every day with LBJ is an eye-opening day.... Every day I learn something I'd never thought of." Nov 21 story in L.A. Times, "Specialist on LBJ Awarded Book Prize."

Some web links:

• "Long excerpt from Master of the Senate here at this Smithsonian site"


• Christian Science Monitor book review


• Ronald Steel's long review in the July/August Atlantic


• Nicholas Lehman's review, "The Power and the Story," in the New Republic


• Marshall Frady's review, "The Prospero of the Senate," in the New York Review of Books

posted by Ben Muse at 6:25 PM

 
John Rawls dead

Harvard philosopher John Rawls died yesterday (Sunday, Nov 24) at age 81. Rawls argued (in A Theory of Justice) that we should adopt a rule that policy changes and different states of society should be judged by the status of the worst-off members of that society. Main stream economics looks for (a) policy changes that make at least one person better off without making anyone worse off, or (b) policy changes where the people who benefit are benefited enough so that they could, theoretically, compensate the people who are not made better off (whether or not the compensation is paid). A Rawlsian rule would judge policy changes by the impact on the worst-off in society.

Sources:

• "John Rawls Resource Page"


• Newsday: "Philosopher John Rawls Dead at 81"


• Washington Post: "Philosopher John Rawls Dies; Dissected Basis of Liberalism"


• New York Times: "John Rawls, Theorist on Justice, Is Dead at 82" (may require free registration)


• Chris Bertram's blog has a short essay with additional links.

The New York Times summarized his most important theory in its obituary:

"...social and economic inequalities are just only to the extent that they serve to promote the well-being of the least advantaged.

"But how could people agree to structure a society in accordance with these two principles [the "least advantaged" principle and another dealing with liberty - Ben]? Dr. Rawls's response was to revive the concept of the social contract...

"For people to make the necessary decisions to arrive at the social contract, Dr. Rawls introduced the concept of a "veil of ignorance." This meant that each person must select rules to live by without knowing whether he will be prosperous or destitute in the society governed by the rules he chooses. He called this the "original position."

"An individual in the "original position" will choose the society in which the worst possible position — which, for all he knows, will be his — is better than the worst possible position in any other system.

"The result, Dr. Rawls argued, was that the least fortunate would be best protected. The lowest rung of society would be higher. Though inequalities would not be abolished by favoring the neediest, they would be minimized, he argued."

posted by Ben Muse at 6:07 PM

 
How should we vote?

Apparently not like we do. Voting is an important way of allocating scarce resources among competing ends, so how we vote - the method we use to aggregate the votes and determine the result - is important. We can do this in different ways. Science News has a nice article by Erica Klarreich about alternative voting systems on their web page, here: "Election Selection. Are we using the worst voting procedure?".

"Nearly all political elections in the United States are plurality votes, in which each voter selects a single candidate, and the candidate with the most votes wins. Yet voting theorists argue that plurality voting is one of the worst of all possible choices. "It's a terrible system," says Alexander Tabarrok, an economist at George Mason University in Fairfax, Va., and director of research for the Independent Institute in Oakland, Calif. "Almost anything looks good compared to it..."

Check out the rest.

I learned about this item at the ArgMax Economics Weblog.
posted by Ben Muse at 7:13 PM

 
Can we reduce our dependence on foreign oil by driving less?

Addressed here at The Volokh Conspiracy: "WHEN YOU DRIVE ALONE YOU DRIVE WITH SADDAM".
posted by Ben Muse at 6:53 PM

 
The Jane Galt Tax Plan

What changes would you make in the Federal tax system if you ruled the world? How do they compare to the changes Jane would make? :"The Jane Galt Tax Plan".
posted by Ben Muse at 6:45 PM

 
Paul Krugman

I never really understood, or cared to understand, macro- or international economics until I started reading some of Paul Krugman's popular books (Peddling Prosperity for example, and, more recently The Return of Depression Economics), and begin visiting Brad DeLong's website (another posting sometime). My understanding's still weak, but I care now and I'm trying to improve it.

Krugman knows the theory, knows the real world, brings each to bear productively on the other, is a good writer, and a talented teacher. His books had an agreeably tart "suffer no fools" quality. There was passion and indignation. More recently (since Janaury 2000) he's been writing economic columns in the New York Times. These are also worthwhile, but he doesn't like the Bush Administration, he doesn't like it a lot, and this influences almost every paragraph.

Krugman is the subject of an article by Nicholas Confessore in the November Washington Monthly magazine. You can access the web version here: "Comparative Advantage. How economist Paul Krugman became the most important political columnist in America".

"There have always been columnists who, for better or worse, commanded the greatest attention of their day. Think of Walter Lippmann during the postwar consensus, Joseph Kraft during the Vietnam era, or George Will during the Reagan years. William Safire heralded the Clinton backlash of the early 1990s, Maureen Dowd the frothy, decadent latter half of the decade. In much the same way, Paul Krugman, who has written a column twice-weekly for The New York Times since January 2000, is essential reading for the Age of Bush. If you work in Washington, you probably read Krugman's column, and if you read Krugman's column, you probably have strong feelings about Krugman himself. Mention his name at a Washington dinner party, and at least a few people are bound to rave--or curse..."

Other Krugman resources:

• The new Paul Krugman website (Krugman's own web site at Princeton)


• The Unofficial Paul Krugman Archive


• "Paul Krugman, The Great Debunker. A Nobel-Bound Economist Punctures the C[onventional] W[isdom]--and Not a Few Big-Name Washington Egos" (a Newsweek article by Michael Hirsch posted on Brad DeLong's website)


• "Paul Krugman is a wonderful columnist" (Salon Krugman discussion group)

posted by Ben Muse at 1:06 PM

 
Are different people willing to pay different amounts to change the risk of death?

In a democracy you'd think you'd want decisions to reflect the values of the people. You'd be interested in the values people placed on different impacts of policy decisions. Now many policy decisions will inevitably affect health risks and the risk of dying. A wide range of environmental decisions do so (air pollution, water pollution, toxic waste disposal, fishery management regulations that affect the risks faced by fishermen, and so on). A wide range of job safety, transportation (cell phone use in cars) and other decisions do so also. So, there should be an interest in the values people place on changes in different health and mortality risks.

And economists have responded to this need, looking for ways to make inferences about the values people actually place on changes in these risks. Perhaps the most important source of information is gained by looking at decisions people make in the work place. Economists compare wages and job risks, holding other factors constant, and make inferences from these behavioral decisions. But one drawback of this work is that it looks at decisions made by a subset of the population - heathy working people between maybe 21 and 65. Are the values held by this group appropriate for all other population segments?

A Resources for the Future (RFF) working paper from last April, "Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada" (by Anna Alberini, Maureen Cropper, Alan Krupnick, and Nathalie B. Simon) looks at this question, and finds:

"Our results provide weak support for the notion that WTP declines with age, but only after age 70. Specifically, in our Canadian sample, WTP declines by about 30% after age 70 compared with WTP at younger ages. There is no such statistically significant decline, however, in the U.S. sample. We similarly find no support for the idea that people who have cancer or chronic heart or lung disease are willing to pay less to reduce their risk of dying than people without these illnesses. If anything, people with these illnesses are willing to pay more."

Source: Alberini, Anna, Maureen Cropper, Alan Krupnick, and Nathalie B. Simon. "Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada." Discussion Paper 02–19. Resources for the Future. April 2002. Accessed at: "Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada" on November 23, 2002.
posted by Ben Muse at 10:31 AM

 
Why do we get along so well with dogs?

"Meanwhile, a study published simultaneously Friday helps explain what may be the most enduring canine mystery of all: What is it about dogs that makes them so compatible with people? In the first direct comparison of its kind between dogs and chimpanzees, dogs demonstrated an uncanny ability to interpret human communicative cues - gleaning information from subtle hand gestures and even getting the meaning of a human glance - while the brainy chimps remained clueless to what was going on.

"It may not be news to dog owners, but now it can be said with some scientific assurance: Selective breeding over the centuries has created an animal that in some respects, at least, understands us even better than our closest primate cousins do."

See "How Dogs Got That Way" by Rick Weiss in today's electronic International Herald Tribune for the rest.
posted by Ben Muse at 9:40 AM

 
Gulf Wars Episode II: The Clone of the Attack

"Gulf Wars Episode II: The Clone of the Attack"

Thanks to The Volokh Conspiracy for the "heads up."
posted by Ben Muse at 2:36 PM

 
Sorry for the delay

Sorry for not updating the blog since 11-11. I've actually been posting, but couldn't get Blogger to deliver the posts to the web site. The composition page would tell me the posts had been published - I wouldn't get an error message - but nothing had happened.

First step in solving the problem was joining (this afternoon) the "Blogger_user_support" discussion group sponsored by Yahoo.

Second step was finding the following post by "veeda00" (phil) on November 13. Phil had had exactly the same problem and had figured out the solution:

it actually turned out to be my host in the end. they switched ftp servers a few weeks ago and this impacted the path to my folder. i didn't notice because my ftp client automatically searched for the folder so i never had any problems ftping manually. unfortunately when blogger was publishing my stuff it wasn't getting through. anyway all's well that ends well! thanks for your help on this phil!

Third step was turning the problem and phil's note over to my son Peter who actually knew what phil was talking about.
posted by Ben Muse at 10:43 PM

 
Good advice about figurative expressions

Eugene Volokh has the advice on figurative expressions from a textbook he's writing on "Academic Writing for Law Students" here:"AVOID THE FIGURATIVE, BUT NOT LIKE THE PLAGUE". Danger c(iii) of figurative writing is:

"Figurative usages that allude to some literary work or historical practice may clash with their original meaning. To "decimate," for instance, originally meant to kill every tenth person as a collective punishment (hence the old joke about how "You can tell the ancient Romans were tough -- in their language, 'to kill every tenth person as a collective punishment' was one word"). The figurative meaning, which is "to dramatically reduce," is now well established, but some people are still reminded of the old usage, which can either distract or annoy them."

posted by Ben Muse at 8:29 PM

 
Bush Administration Environmental Policy

Monday's Washington Post has an article by Eric Pianin and Helen Dewar on the impact of the Republican victories in the recent elections on upcoming environmental issues in Congress: "Oil, Air, Energy Laws in Play.
Environmentalists Fear New Senate ".

"Suddenly, President Bush's proposals to drill for oil in an Alaskan wilderness, boost energy exploration in the Rockies and consider changes to some major environmental laws are back in play, following the Republicans' resounding success in last week's congressional elections..."

posted by Ben Muse at 9:11 PM

 
Economics for Public Managers

"Economics for Public Managers," (PADM 293) is the UAS MPA ten week economics introduction/review (covering micro and macro). The distance class is one of the options for students to meet their economics proficiency prerequisite. Note that you must have met the economics proficiency prerequisite before taking "Economics of Public Policy" or "Public Budgetary Process." This class is normally offered every other summer, and comes up next in the Summer of 2003.

We set the dates and times at a faculty meeting yesterday. In 2003, the class will begin on Tuesday, May 13, and meet every Tuesday through Tuesday, July 15 (by starting a little earlier in 2003, we should all be able to get about six weeks of uninterrupted summer before the fall semester). Class meets from 6 PM until 9 PM.

The textbook is The Economic Way of Thinking by Heyne, Boettke, and Prychitko - 10th Edition. Students will want to get the associated workbook. I haven't decided whether or not to have an ancillary text in 2003.
posted by Ben Muse at 2:07 PM

 
Intergenerational mobility

In Thursday's New York Times, Alan Krueger surveyed studies on intergenerational changes in income levels and found that mobility in the U.S. is less than had been thought, in fact:

"The data challenge the notion that the United States is an exceptionally mobile society. If the United States stands out in comparison with other countries, it is in having a more static distribution of income across generations with fewer opportunities for advancement.

"Anders Björklund of Stockholm University and Markus Jäntti of the University of Tampere in Finland, for example, find more economic mobility in Sweden than in the United States. Only South Africa and Britain have as little mobility across generations as the United States."

Click here for the full article: "The Apple Falls Close to the Tree". I learned about this from "Brad DeLong's Website"
posted by Ben Muse at 3:54 PM

 
L. Frank Baum

Baum, the author of the Wizard of Oz and many other children's books is the subject of a new biography, reviewed favorably by Brooke Allen in today's New York Times here: "'L. Frank Baum': The Man Behind the Curtain".

"The quintessentially American quality of these tales has struck many readers. Alison Lurie has likened Oz to ''an idealized version of America in 1900, happily isolated from the rest of the world, underpopulated and largely rural, with an expanding magic technology and what appear to be unlimited natural resources.'' And the values Baum unobtrusively preached to his young readers are also characteristically American: egalitarianism, tolerance, suspicion of pomp and ceremony, and a deep mistrust of leaders -- even democratically elected ones. As the Tin Woodman remarks of his stint as emperor of the Winkies, ''Like a good many kings and emperors, I have a grand title, but very little real power, which allows me time to amuse myself in my own way.'' Baum often uses such asides as a vehicle for wry commentary: the citizens of the Emerald City, for instance, are pleased by the Scarecrow's accession to the throne, '' 'For,' they said, 'there is not another city in all the world that is ruled by a stuffed man.' And, so far as they knew, they were quite right'' -- the ''so far as they knew'' being a brilliant comment upon rulers as a species."

A number of authors have argued that the Wizard of Oz is an allegory based on late 19th Century populist monetary politics. Allen doesn't say whether or not the biography addresses this. Bradley Hansen, writing in the most recent issue of the Journal of Economic Education argues that it wasn't . (See "The Fable of the Allegory: The Wizard of Oz in Economics"). Bradley traces the idea back to 1964:

"In 1964, Henry Littlefield, a high school history teacher, described what appeared to be numerous coincidences between The Wonderful Wizard of Oz and the Populist movement of the late 19th century. Once viewed through a Populist lens, the symbolism of the book appears incredibly obvious. The Scarecrow represents farmers, the Tin Woodman represents industrial workers, and the Cowardly Lion represents William Jennings Bryan.1 Dorothy was told to follow a yellow brick road—the gold standard. People in the Emerald City were forced to look at everything through green glasses—greenbacks. The silver shoes—coinage of silver—really had the power to take Dorothy home. Oz itself refers to the abbreviation for an ounce of gold." (page 255)

But he argues that despite appearances, this wasn't Baum's intent.

"On closer examination, the evidence in favor of the allegorical interpretation melts away like the Wicked Witch of the West. In contrast, the evidence against the allegorical interpretation is abundant. It can be grouped into four categories. First, there have not been multiple independent discoveries of the allegorical interpretation. Second, Baum was not reluctant to express his political views, yet he did not express Populist sympathies and did express anti-Populist sympathies.
Third, much of what is written in The Wonderful Wizard of Oz and Baum’s other children’s books is inconsistent with the allegorical interpretation. Fourth, much of what has been interpreted as political or economic symbolism in the book can be traced to other sources." (page 257)

P.S. November 19 Geitner Simmons points to a dark side of L. Frank Baum here: "The Wizard of Oz and genocide".
posted by Ben Muse at 10:28 AM

 
Federal work rules

Howard Kurtz wonders, in today's Washington Post "Media" column,

"Now that a compromise has been struck over the president's homeland security department, we wonder why the press hasn't grappled with the following question:

"If federal personnel rules are so restrictive that Bush demanded they be waived for his new agency, why are they okay for the rest of the government?

"Why isn't it a huge problem at the Treasury or the Justice Department or the Energy Department or the EPA?

"In short, why is it so hard to fire lousy federal employees?

"The media have covered this debate as a typical political food fight: President demands new powers, Democrats beholden to labor unions, royal battle ensues (depriving them of credit for a department that, ironically, the Dems had originally demanded and Bush had resisted).

"But is the fact that the government is a management mess so ingrained in the culture of Washington that journalists simply don't find it newsworthy?

"This is not to suggest that the bureaucracy is filled with dead wood, only that it's all but impossible for managers to do any pruning without getting tied up in endless appeals.

"A 1995 survey of 5,700 government bosses by the Merit Systems Protection Board says that "very few federal managers bother" trying to get rid of incompetent staffers because they believe the process is "too complicated, time consuming or onerous." They also believe that upper management will not support them, their decisions will be reversed on appeal or they will be falsely accused of discrimination.

"The result: "Many supervisors believe it is simply not worth the effort to attempt to remove federal employees who cannot or will not perform adequately."

"As one State Department staffer recently wrote The Washington Post's Federal Diary, "by far the most frustrating aspect of my work is putting up with the gross incompetence and downright laziness of some federal employees" who "know they cannot be fired."

"Now there's a real campaign issue. But no one wants to take it on – even Bush was careful to limit his initiative to homeland security, as if everything else is chopped liver – and the media, apparently, could care less."

Source:"Washington's Untouchable Issue".
posted by Ben Muse at 12:31 PM

 
Moving Federal jobs to the private sector

From the New York Times today: "Government Plan May Make Private Up to 850,000 Jobs""WASHINGTON, Nov. 14 — The Bush administration said today that it would place as many as 850,000 government jobs — nearly half the federal civilian work force — up for competition from private contractors in coming years.

"Officials said the intent was to save money by ensuring the lowest cost for many routine duties like mowing lawns, picking up trash, making eyeglasses and printing paychecks. But the sweeping policy change, which could potentially lead to the shift of many thousands of jobs to the private sector, infuriated union leaders, who are already fighting the White House over labor management rules in the new Homeland Security Department...."
posted by Ben Muse at 12:26 PM

 
Neuro-economics?

From "This is your brain. This is your brain on a surging stock" by Sharon Begley in today's Wall Street Journal:

"At a brain-imaging center in Massachusetts, a team of scientists that includes one of this year's Nobel laureates in economics makes functional magnetic resonance imaging scans of volunteer's brains. When people anticipate monetary rewards, the fMRI shows, the circuits that switch on are the very ones that go wild when you anticipate a delectable chocolate truffle, sex or (in the case of addicts) cocaine.

"At a lab in Virginia, researchers measure brain activity in subjects who cooperate to maximize financial gain. By comparing it with the activity in people who take the money and run - but wind up with less dough - the scientists are unearthing the neuronal basis for the fundamental trust that underlies financial transactions.

"Welcome to neuroeconomics....marriage of brain science and economics...

For the rest, go to the source: WSJ, 11-15-02, page B1.
posted by Ben Muse at 12:22 PM

 
Administration systematically pushing on NEPA

The National Environmental Policy Act (NEPA) is a key environmental law, requiring evaluations of environmental impacts for a wide variety of Federal actions. The Bush Administration has been pushing on a wide variety of fronts to reduce the level of analysis required for actions - the High Country News discussed the Administration's efforts to modify NEPA requirements in transportation planning on October 28: "Bush undermines bedrock environmental law":

But the Bush administration has been chipping away at this bedrock environmental law. In May 2001, using the pretext of an impending energy crisis, President Bush issued an executive order to expedite oil and gas drilling on public lands (HCN, 9/2/02: Bush's energy push). While a federal task force has started looking at ways to "streamline" NEPA, the administration's proposed Healthy Forests Initiative would exempt some timber projects from the law (see story below). Now, thanks to another executive order, some proposed highways and airports may get green lights without substantive environmental review.

"'The transportation executive order follows the same pattern the administration has set for all things NEPA-related," says Rob Perks with the Natural Resources Defense Council. "'Streamlining' to us is just a code word for steamrolling.'"

The L.A. Times surveyed Administration efforts to modify NEPA requirements for energy development, forest management planning, and Navy sonar testing on November 3: "White House Reinterpreting Law on Environmental Reviews" (This L.A. Times link may require free registration):

"In a series of efforts to limit the reach of the nation's bedrock environmental law, the Bush administration is working to prevent environmental impact statements from blocking or stalling energy production, logging and other controversial uses of federal lands and waters.

"From oceans to deserts, the administration is making the case that the National Environmental Policy Act applies only to activities that could potentially cause major environmental damage.

"The Bush administration argues that the 1969 law has become a bureaucratic obstacle to action because it has been interpreted as requiring environmental impact statements even when proposed actions would obviously have no major effect. It says its goal is to cut red tape, streamline decision making and get more done...."

For another survey, take a look at this November 7 Christian Science Monitor article here: "Environmental 'Magna Carta' law under fire" In August I posted on the Administration's efforts to limit the application of NEPA in U.S. waters marine waters. There was also at least one posting on the Administration's interagency NEPA review. The "Picosearch" can help recover those links to other references.

The source for the articles listed here was the Forest Service in the News web page maintained by the Forest Service Employees for Environmental Ethics. This is a list of links to environmentally important news stories (and some other items) from a wide range of on-line media. Many important U.S. national and regional newspapers are represented. The page is updated frequently (almost daily?).
posted by Ben Muse at 9:44 PM

 
How could we not have known? The late bubble

The Washington Post began a series on the 1995-2000 stock bubble yesterday. The theme: How did the bubble happen?

How could this have happened? Why did otherwise honest people resort to obfuscation, game-playing and outright fraud just to keep going? Where were the safeguards that were supposed to warn against the dangers and prevent the excesses?

"This week, The Post will explore these questions in a series of stories that focuses on six individuals and companies at the center of the Bubble Economy. The theme running through all of them is that many of the key people involved in the economy got so caught up in the euphoria, so blinded by the financial rewards dangled in front of them, that they stopped doing their jobs -- or convinced themselves that the nature of their jobs had changed."

It looks like the Post plans to explore this through cases studies of a telecom CEO, a NASDAQ executive, a reporter, a venture capitalist, an investment bank, and an analyst. Part 1 came out yesterday (Sunday, Nov 10) and part 2 today. Link here for the series: "Bubble: The Roots of the 90's Boom and Bust"
posted by Ben Muse at 10:12 AM

 
The Administration's post-election economic agenda

Richard Stevenson has an article on the administration's economic policy plans in today's New York Times: "Bush's Way Is Clear to Press His Agenda for the Economy". The program

It is sure to include making permanent the 10-year tax cut passed last year, securing new tax cuts for investors, holding down spending in areas other than national security and moving slowly toward overhauling the tax code and Social Security...

"...He and Republicans in Congress have also made clear that they intend to do more to shield companies and doctors from lawsuits, continue to loosen environmental regulations and promote more international trade."

The administration's actions are particularly important now, in part because there is limited additional scope for monetary policy:

"...Alan Greenspan, the Federal Reserve chairman, was seen in recent years as having far more power to smooth out economic bumps than the president. But the Fed has just about exhausted its power. It has pushed its main interest rate down to 1.25 percent through 12 rate cuts over the last two years, leaving it with little room to reduce rates further.

With the Fed all but sidelined, the focus is shifting to tax and spending policy...."

posted by Ben Muse at 8:59 PM

 
Cindy Skryzcki is back

Cindy Skryzcki writes a column on regulation for the Washington Post. Her column was suspended temporarily last year while she apparently took a sabbatical to write a book on regulation. She started appearing weekly again in October - you can access her recent columns, and some older ones, here: "The Regulators". This site also has links to Post stories on a range of regulatory agencies (CPSC, FCC, FEMA, FERC, FTC, NHTSA, NLRB, and SEC - check the site to find out who is who). Oddly, OSHA and EPA aren't listed.
posted by Ben Muse at 8:41 PM

 
Economic jokes

The Arnold Kling essay linked below has some funny quotes, which reminds me about the "Jokes about economists and economics" web page. For example:

TOP 10 REASONS TO STUDY ECONOMICS
1. Economists are armed and dangerous: "Watch out for our invisible hands."
2. Economists can supply it on demand.
3. You can talk about money without every having to make any.
4. You get to say "trickle down" with a straight face.
5. Mick Jagger and Arnold Schwarzenegger both studied economics and look how they turned out.
6. When you are in the unemployment line, at least you will know why you are there.
7. If you rearrange the letters in "ECONOMICS", you get "COMIC NOSE".
8. Although ethics teaches that virtue is its own reward, in economics we get taught that reward is its own virtue.
9. When you get drunk, you can tell everyone that you are just researching the law of diminishing marginal utility.
10. When you call 1-900-LUV-ECON and get Kandi Keynes, you will have something to talk about.

Many more jokes here, including one in Finnish!
posted by Ben Muse at 9:23 PM

 
A skeptical view of this year's Nobel Economic Prize choices - "saltwater v sweetwater" economists

How should we judge economic theories? By the plausibility of their assumptions? By the accuracy of their predictions? A good and readable article by Arnold Kling in the Tech Central Station: "Sweetwater vs. Saltwater ".

"The Sweetwater school views the economist as a prediction-making machine. As long as the economist's predictions are nontrivial and accurate, the underlying assumptions themselves do not need to be examined. By the same token, Sweetwater economists would argue that in order to show that irrational behavior and imperfect markets matter, you must use your theories to make nontrivial and accurate predictions. It is not sufficient to demonstrate in a psychological experiment that people miscalculate. It is not sufficient to demonstrate in a simulated market that strange outcomes occur. The relevance of such findings depends on one's ability to use them to make valuable predictions about the behavior of prices and trade patterns in the real world.

"By these standards, I believe that this year's Nobel laureates fall short. The "experimental economics" that follows Vernon Smith has generated very few predictions about real-world markets that differ from the predictions of standard mathematical models. To the extent that there have been unique predictions, to my knowledge they have not been demonstrated to be valid in any real-world setting."

posted by Ben Muse at 9:11 PM

 
An interview with Daniel Kahneman

Kahneman shared the Nobel Prize in Economics this year (but see one of the posts yesterday). The New York Times published an article on his work by Erica Goode, and a short interview with him, today: "On Profit, Loss and the Mysteries of the Mind". A nice intorduction to his ideas, his long-time collaboration with Amos Tversky, and implications of his work for economics.
posted by Ben Muse at 4:37 PM

 
Dealing with global warming

Nations are moving towards a new approach to dealing with global warming - impact mitigation is becoming relatively more important compared to prevention. Sunday's New York Times reports on a global warming conference that closed in New Delhi on Friday: "Climate Talks Shift Focus to How to Deal With Changes"

"he global climate is changing in big ways, probably because of human actions, and it is time to focus on adapting to the impacts instead of just fighting to limit the warming. That, in a nutshell, was the idea that dominated the latest round of international climate talks, which ended on Friday in New Delhi...

"The emphasis on adapting is a profound turnabout from the course set a decade ago after President George Bush and other world leaders signed the United Nations Framework Convention on Climate Change. Though that treaty and subsequent addenda contained vague commitments by industrial nations to help vulnerable countries adapt, the emphasis was always about curbing emissions to prevent dangerous changes in the climate system.

"Adaptation got support in New Delhi because it suits both the current Bush administration, which has tried to shift debate away from emissions reductions, and developing countries, which have expressed frustration at the developed world's inertia in limiting its own emissions and its delays in pledged aid.

"At the meeting, poorer countries did not quite say it was their turn to pollute but, led by the host country, they did demand the right to grow out of destitution, a path that will require vast use of existing fuel reserves — mainly coal."

posted by Ben Muse at 10:10 PM

 
When is a Nobel Prize not a Nobel Prize?

When it's a Nobel Prize in Economics: "Nobel by association: beautiful mind, non-existent prize". (by Yves Gringas at openDemocracy).
posted by Ben Muse at 12:05 PM

 
Irrigation vs in-river flows on the Klamath River

The Wall Street Journal reports today a U.S. Geological Survey (USGS) economist has done a benefit-cost analysis indicating the benefits of reducing the volume of Klamath River water used for irrigation exceed the costs. Recall that water allocation on the Klamath became a national controversy this summer when 30,000 salmon died in the river. Key paragraphs:

"The 32 page report, viewed by The Wall Street Journal, estimates it would cost about $5 billion to remove the farmers from the pipeline and take other restoration actions. It says abut $36 billion in economic benefits would come over a number of years from more visitors using the Klamath River system for recreational activities such as fishing and boating...

"The farms generate about $100 million in revenue a year, compared with almost $800 million generated by recreational activities along the Klamath and its tributaries, the report says. A resurgence in river levels would increase the recreational revenue to abut $3 billion annually by prompting more people to visit more often, the report estimates."

The Journal reports that the results of the analysis were originally scheduled for release this summer, but that release has been delayed pending USGS approval.

posted by Ben Muse at 8:55 PM