31.10.04

INSTITUTIONS EVOLVE TO REDUCE TRANSACTION COSTS. Hey, distributing beer isn't cheap. Small brewers discover that wholesalers, well, want to get paid. Yes, it does limit consumer choice, but if a brewer is having trouble working with wholesalers, how many consumers are making that choice?
However, there continues to be strong demand for craft beers, Nolen and Rodman said. And specialty beers sell for higher prices - and provide fatter profit margins - for both brewers and wholesalers, said Martino.

Randy Sprecher, whose Glendale-based Sprecher Brewing Co. will celebrate its 20th anniversary next year, said he long ago accepted that distributors pay the most attention to beers with strong sales - and not necessarily strong margins. Specialty brewers have to deal with that reality, he said. Sprecher has grown his company in part by expanding his line of gourmet sodas, which are now sold in such far-flung areas as San Diego and Boston.

"We simply know what we have to do to stay alive," Sprecher said.
That sums it up, doesn't it? Margin is meaningless without volume.
MOVING UP BECAUSE OTHERS HAVE DONE WORSE. Wisconsin's football Badgers have moved up in the polls as teams that actually played lost games. There is a serious challenge coming in the form of Minnesota, reports of difficulties notwithstanding. Northern Illinois also moved up, despite letting Ball State come back from trailing 21-3. The defense had the last word, making the fourth-down stop in the first "inning" of overtime. There is a reason teams play games rather than simply rely on power ratings.
THINGS THAT MAKE YOU GO HMMM.... Jessica's Well invites readers to compare and contrast.

Take a good look at the photo on the left. In the foreground are four women. From the left, Drew Barrymore and Cameron Diaz. Two major movie stars who pull down roughly $15-20 million per movie...for 6 to 12 weeks work. Next is Christina Aguilera, a pop music diva. On the far right, of course, is Oprah Winfree. Three multi-millionaires and a multi-billionaire.

Three multi-millionaries and a multi-billionaire all made fabulously wealthy by modern media and communications sitting on the set of a talk show with world-wide syndication....saying these completely idiotic things and doing it in front of a graphic showing a woman with her mouth stitched closed.

On the right is a photo of women lining up to vote for the first time ever. Women who are not only prepared to die in the act, but have assigned enough of a probability to that outcome that they have gone through a death ritual in advance of leaving for the polls.

I can't really assign responsibility to anyone for the scene shown on the left.

I can, however, assign responsibility for the scene on the right to a very courageous and determined American President.

One that deserves very much to be re-elected.

Consider also American Digest's thinking.

It's not that I'm overjoyed with George Bush (although at least one of my friends cannot be convinced otherwise), nor that I think the Republican Party is overwhelmingly admirable. None of that. It's never easy to vote when the only viable choices are two, but that's the deal right now. And my job today as a citizen is to choose. So I will choose George W. Bush.

There are many reasons why, but here's 50.

From the Mudville Gazette:
A very necessarily empty throne in Baghdad. It's not that hard to understand, is it?
And at the New York Daily News, the editorial board (via Power Line) holds its nose.

At this critical juncture, America cannot afford such a lack of clarity — or even a hint that a President would revert to playing defense rather than staying on the offensive. Nor would it be wise to change commanders midbattle in Iraq and around the globe, replacing a tested leader with a man who would have to learn on the job under the most difficult circumstances. With so much at stake, that's a transition not to be wished for.

Returning Bush to office is the wise course, The News believes, despite our sharp disagreement with his domestic policies. Those pale in comparison with the overarching challenge of securing the nation and preserving New York's vital way of life. Of the two candidates, Bush has the clearer vision for accomplishing the goal, as well as the greater experience. He gets our endorsement.

Their disagreements with the Administration's domestic policies are for another day.

The News is dismayed by Bush's domestic record. His presidency simply has not been about serving the interests of middle-class and working-class families, whose fortunes have declined. Most tellingly, Bush weighted the centerpiece of his program — deep tax cuts — to the wealthy, providing a costly bonanza to those on top without generating an economic lift for everyone else. A sorry result was the biggest drop from budgetary surplus to deficit in U.S. history — just a few years before millions of baby boomers will retire and thus threaten the solvency of Social Security and Medicare.

Kerry's domestic agenda is preferable. He would repeal Bush's tax reductions on incomes of $200,000 and up, promises to find money for new programs without increasing the deficit and has advanced thoughtful proposals for addressing intractable problems such as the growing number of Americans without health insurance. His plan generally tracks the philosophies of Democratic predecessors Bill Clinton and Al Gore.

The preceding paragraphs are chock full of wishful thinking. First things, though, for the government, include the unconditional surrender of Osama and the like, in order that we can evaluate the Utopian Wonkery (TM) without looking over our shoulders.

30.10.04

SO MUCH YET TO DO. Troubling anecdote from last week's Economic Education Day luncheon at the Union League Club in Chicago. One of the speakers worked for a while at Goodwill Industries. He asked some of the new workers there why they had left their last job. All too often, they accused their employer of cheating. Why? "I was promised $6 an hour, I put in my 40 hours, my check was not for $240." There is this little thing called the tax code ... it is not necessarily in your curriculum.
LIBERTARIAN ASSESSMENTS OF THE MAJOR PARTY CANDIDATES. Megan at Asymmetrical Information has a fourteen point comparison. This observation on the economy is spot-on.
I don't think the president has much, if anything, to do with how the economy runs, unless he's one of those disastrous tinkerers, like FDR and Richard Nixon. Neither of the current candidates is such a lackwit, meaning that their impact on the economy will be minimal indeed. Neither candidate gets my vote here.
David at Hog Heaven has a different set of fourteen points (I think ...)
FOURTH TURNING ALERT. John Micklethwait and Adrian Wooldridge offer the short summary of tensions in North American conservatism. The long form is in their book, Right Nation (details or compare prices).
From Sept. 11 till the Iraq invasion, most conservatives expected that the war on terror would hold their movement together. The "axis of evil" would fit into the slot vacated by "the evil empire." And the conservative foot soldiers would put aside their differences--particularly over government spending--in a common war against Islamist extremism.

There are still times when that theory holds--the GOP convention was a masterly exposition of this unifying credo--but as Iraq gets ever messier, the noises off-stage grow louder. Conservatives as diverse as William F. Buckley and Pat Robertson have started to air their doubts. That clamor would become deafening if the Republicans lose the presidency on Nov. 2, with the neoconservatives the main target of the movement's wrath. But even if Mr. Bush wins, the neoconservative dream at its most fanciful is surely over. The neocons will remain; they are too clever and too prominent on Washington's rive droite to disappear. But the main question will be which representatives of other conservative foreign-policy traditions--particularly realism--will be able to re-establish influence.

The result is a paradox: A president who has devoted his energies to governing on behalf of conservative America and who is regarded by many on the right as being the most conservative person to ever reach the White House has ended up creating deep divisions on the right. Big-government conservatism has alienated influential small-government activists; you can even find prominent Washington libertarians saying that they would rather have a Massachusetts liberal with no legislative record to his name in the White House than a Texas Republican who has managed to expand both education and Medicare. Social conservatism has alienated the party's Western wing. And the Iraq War has reinforced doubts among all sorts of conservatives that Bush's Reaganism has shaded into Wilsonian liberalism--one that ignores conservative insights into both the difficulty of implanting democracy in hostile soil and the dangers of stirring up fanaticism.
The coming changes ... particularly as the G.I. and Silent Generation old heads retire ... promise to be interesting, as their thinking does not envision the Democratic Party capturing any of these elements of the Republican coalition. There are younger members of the Democratic Party who might be able to pull that off. I was listening to an interview with a Democratic candidate for an Illinois house seat who ... in some parts of the interview ... did not sound like the usual Democrat.
A COUNTEREXAMPLE CAN BE A DISPROOF. Would a truly overworked American make homemade doggy treats? On the other hand, would a truly overworked American have time to read and clip the recipes in the Sunday papers?
QUOTE OF THE DAY:
The American answer to Osama's proposal will be given on Election Day. One response is to agree that the United States of America will henceforth act like Sweden, which is on track to become majority Islamic sometime after the middle of this century. The electorate best knows which candidate will serve this end; which candidate most promises to be European-like in attitude and they can choose that path with both eyes open. The electorate can strike that bargain and Osama may keep his word. The other course is to reject Osama's terms utterly; to recognize the pleading in his outwardly belligerent manner and reply that his fugitive existence; the loss of his sanctuaries; the annihilation of his men are but the merest foretaste of what is yet to come: to say that to enemies such as he, the initials 'US' will always mean Unconditional Surrender.
That's Belmont Club, noting the latest Bin Laden tape, which Power Line compares to the kid about to be clobbered on the playground calling "time out."

Time for a qualified endorsement. Although my filling in the circle for President Bush is unlikely to affect the allocation of Illinois's electoral votes, at the margin it might affect the popular vote, for the benefit of those ignorant observers who think such aggregates (add up the total runs in the American League Championship Series, kiddies) matter.

These pages have noted the lack of progress, despite majorities in Congress and a friendly High Court, on school vouchers, private retirement accounts, retirement savings accounts, and a market-based transportation policy. These somewhat more critical observations from The Agitator are not without merit. It takes, however, something to beat something. Senator Kerry ... and the minor candidates ... fall short on this score.

President Bush has a tendency to cling to a position for perhaps too long. His core values, however, are values I am comfortable with. Senator Kerry has a tendency to be too flexible. His core values, unfortunately, are core values that trouble me.

29.10.04

WHY THIS JOB IS FUN, NOVICE DIVISION. The annual Economics Poster Contest for elementary and middle school students has begun.



This entry, submitted by a third grader to the Northern Illinois University regional competition, earned a place on the state calendar.

The call for entries is available online through the Northern Illinois University Office of Economic Education.

SECOND SECTION: Will somebody step up and organize a poster contest for Minnesota? There's some wishful thinking in their elementary curriculum.

28.10.04

THINGS THAT MAKE YOU SAY D'OH! Researchers: Stress Causes Forgetfulness.
How many people have gotten home after a blindingly stressful day and realize they've forgotten some important event or errand? Well, now at least there's a scientific explanation for the oversight. Stress makes you forgetful.
To borrow from James Taranto: What Would We Do Without Researchers?
JUST SUCK IT UP. Michael at Highered Intelligence (via Joanne Jacobs, who hails his return) is not impressed with the latest manufactured crisis the New York Times has discovered, this time the lack of therapeutic resources on university campuses.
Kids need to suck it up and deal. Their parents need to raise them to face difficulties with maturity, grace, and honor. Hey... that's a really nice trio of virtues -- gotta remember that one. Maturity, Grace, and Honor. Goes right up there with Fortitude, Wisdom, and Temperance.
Gee, you don't suppose that enrollment-retention-keep the dorms filled mentality might have anything to do with the problem. Perhaps if students were better prepared for university while in high school -- hey, why not start the preparation in first grade? -- they might have an easier time functioning when they arrive on campus.

None of which stops the Faculty Senate at Northern Illinois University from worrying about ... parking??
Senators commented that traffic from the DuSable bus turnaround has only been relocated to the Chick Evans Field House parking lot. “There is no place for people to drop students off at other than the library,” Sen. [and mathematics professor] Joseph Stephen said. “There is no place like that for the west side of campus.”
Much of the accompanying article on the Faculty Senate meeting is incoherent, so perhaps the professor is being quoted out of context. At class-changing time, the west campus looks like a middle school, only the people doing the dropping off are the same age as the people being dropped off. I'll bet the median drop-off distance is ten blocks or less.

Likewise, there has to be more to this observation from an English professor.

Students are working a lot harder now to pay for tuition, sometimes between 30 and 40 hours a week, said Sen. John Knapp.

“I used to assign eight to 10 big novels for my class,” Knapp said. “Now I am fortunate to get five or six small novels done.”

Have the high schools become less effective at teaching reading?
NO CONCERN FOR THAT HARSH AFGHAN WINTER?

Troops destined to train at Fort McCoy for overseas missions have been diverted to bases in other states after the Army decided the central Wisconsin military installation is too cold in the winter, officials announced Wednesday.

Gov. Jim Doyle blasted the decision to make Fort McCoy a seasonal, rather than year-round, training facility for troops mobilizing for duty in Iraq, Afghanistan and Kuwait.

In a comment on the news item, Owen at Boots and Sabers notes,
Although I would not be happy about losing a base in Wisconsin, I am generally in favor of the military using its bases more efficiently and cost effectively.
True enough. Can policy makers be confident that for the foreseeable future there will be no cause to deploy troops to continental locations with temperate climates?
READ AND UNDERSTAND.
After serving in Iraq, many young veterans find it hard to make the leap from the battlefield to the classroom.
Universities have treated Vietnam-veteran status as a protected class under affirmative action policies. Vietnam era veterans are older than I. There is a war going on, with returning troops not much older than their classmates. The Chicago Tribune article (requires registration) from which the quote is the subtitle suggests that returning veterans from Iraq and Afghanistan are not being offered help with their return to civilian life.
MORE THAN GOOD TIMING. Regular readers will recall that one of the Superintendent's betes noires is maltimed traffic lights. Perhaps abolition of the traffic lights is a superior alternative. Skip at The Sports Economist has discovered a short Regulation essay arguing that although traffic lights cause gridlock, timing them doesn't necessarily help. Other methods of traffic control, including rotaries, four-way stops, and yield signs -- or no signs at all -- might be superior.

These proposals have their pros and cons. In Peking, China, there are many streets with few or no signs ... as long as everyone is courteous and respects "nose position" the traffic, which is often heavy, is at least fluid, in the sense that molasses in January is fluid, but the kind of aggravating stop-and-go common in U.S. cities does not occur.

Britain, however, does not employ the four-way stop. Such configurations can be dangerous. Your turn? No, my turn. Oh, let's both go at once.
WORDS MEAN THINGS. What does it mean for university students to tend to be "liberal?" The Northern Star does some investigative reporting.
“Think about the terms themselves,” [sociology professor Kay] Forest said. “Liberal means a supporter of social change and innovation. Conservative means a supporter of tradition and established institutions. Young people tend to see endless possibilities and dislike restrictions, while the experiences of age can teach that some traditions have their place and too much change has its social costs.”
These days, however, the people who dislike restrictions and seek reform of Social Security and representative governments in the Islamic Quarter are referred to in popular parlance as "conservative" whilst those who seek to restrict employers' freedom to hire, or the cars people drive, or to preserve Social Security, or who question the liberation of Iraq, are the "liberals."

It is difficult to find a better exemplar of a point that arises in Right Nation (details or compare prices.) Conservatism, U.S. style, is a very different beast from that the book's European audience is used to seeing.
BATTERY PARK TO HARLEM IN 15 MINUTES. The Interborough Rapid Transit celebrates 100 years. Live from the Third Rail and Boing Boing (via Where Worlds Collide) cover.

27.10.04

WORKING YOUR WAY THROUGH COLLEGE IS TOUGH ENOUGH. But at some Hooters restaurants (the chicken wings aren't that great) the male help has been making life tougher for the female help.
THE RULE FOR TODAY IS RULE K.
Employes must expect the movement of trains, engines, cars or other movable equipment at any time, on any track, in either direction.
(That's from the General Code of Operating Rules in use by the Western Trunk Lines.) It's advice that others would do well to keep in mind. Yesterday I was returning from a meeting in Chicago on the 5.04 semi-fast, first stop Downers Grove Main Street. We were getting up to track speed near the Cicero Yard, but as the train was meeting an eastbound equipment train, the engineer put our train into emergency. A conductor informed us shortly that we had had an "incident" involving a pedestrian. The incident turned out to be a dead pedestrian. News accounts are sketchy, but my best guess is that somebody in a hurry waited for the eastbound train to clear, then took off, right in front of the train I was riding. One person dead, a thousand people delayed for three hours (why were the Cicero police so hesitant to release the train) and a bit of an adventure transferring all those passengers from one train to a replacement train through one door (to prevent injuries Metra used the wheelchair lifts on one car as a gangplank: everybody had to walk to that car, then transfer to the replacement train, an evolution that took 40 minutes.)

Anyone who must cross railroad tracks as part of a daily routine ought to be familiar with the advice offered by Operation Lifesaver. Walk in front of a train? It won't hurt for long.

25.10.04

PLAYING FOR LEASTER? Does a political party benefit more by losing or by winning? Several commentators on the Presidential election have suggested that a loss would have a salutary effect, although the effect varies by party and by observer.

On the Democratic side, the tension will be between the party's left and its center. Professor Althouse has found a New York Times forum in which Adam Nagourney contemplates the effect of a Kerry-Edwards loss. That effect might be either a return to the McGovern-Mondale-Gore 2000 themes or a return to the Kennedy-Carter 1976-Clinton themes. There are voices urging a left turn. Mitch at Shot in the Dark comments on a Mark Hertsgaard column highlighting the voices on the left. Mr Berg's take: Bring it.
Liberalism as we know it grew over the course of forty years, from the New Deal through the war. Both spawned an America, and a generation pf Americans, with deep faith in their government's ability to solve problems - and the ability to ignore the unintended consequences of the government's power. The Democrat party became the party of statist solutions - under the likes of Truman and Kennedy and Humphrey, statism coupled with the great exceptionalistic vision of America. The Republicans of the day - Eisenhower, Nixon, and a whole generation of Minnesota Republicans - on the other hand became the party of exceptionalistic vision and slightly-less statist solutions.
Mark Steyn, although he has a different thesis, makes the same observation about the folly of a left turn.

So this is no time to vote for Europhile delusions. The Continental health and welfare systems John Kerry so admires are, in fact, part of the reason those societies are dying. As for Canada, yes, under socialized health care, prescription drugs are cheaper, medical treatment's cheaper, life is cheaper. After much stonewalling, the Province of Quebec's Health Department announced this week that in the last year some 600 Quebecers had died from C. difficile, a bacterium acquired in hospital. In other words, if, say, Bill Clinton had gone for his heart bypass to the Royal Victoria Hospital in Montreal, he would have had the surgery, woken up the next day swimming in diarrhea and then died. It's a bacterium caused by inattention to hygiene -- by unionized, unsackable cleaners who don't clean properly; by harassed overstretched hospital staff who don't bother washing their hands as often as they should. So 600 people have been killed by the filthy squalor of disease-ridden government hospitals. That's the official number. Unofficially, if you're over 65, the hospitals will save face and attribute your death at their hands to "old age" or some such and then "lose" the relevant medical records. Quebec's health system is a lot less healthy than, for example, Iraq's.

One thousand Americans are killed in 18 months in Iraq, and it's a quagmire. One thousand Quebecers are killed by insufficient hand-washing in their filthy, decrepit health care system, and kindly progressive Americans can't wait to bring it south of the border. If one has to die for a cause, bringing liberty to the Middle East is a nobler venture and a better bet than government health care.

That left turn, dear Democrats, leads directly to the wilderness. Or is Mr Steyn being polemical, and is he missing the fault lines in the Republican coalition? Those exist, although Elisabeth Bumiller suggests the Republicans will simply suck it up and move on. Perhaps not. Reason's Julian Sanchez sees an opportunity for the libertarians among the Republicans in a change at 1600 Pennsylvania Avenue.
A Kerry win might let [small-government conservatives] have their cake and eat it, too: The larger-government faction currently in the saddle would take blame for the loss, while the small-government faithful could cross the aisle to support pay-as-you-go reforms, which Kerry would be under pressure to follow through on.
That unwieldy Republican coalition has been the great unspoken hope of many observers on the Left. Thomas Frank's What's The Matter With Kansas (details or compare prices) hopes for a split between the cultural Republicans and the libertarians, as he expects that development to send the blue-collar cultural Republicans back to their natural home as Democratic voters. (Perhaps, although some Clement Zablockis and Henry Jacksons to vote for would help.) Frank's book is too polemical to be convincing. I am left with the suspicion that he is disappointed with the Republicans for not being admitted, as were some of his richer neighbors, to an Eastern college or to pledge a prominent fraternity, which he refers to as the "upper reaches of the sex cartel" (that's at page 155, you could look it up.) Another book on a related topic, The Right Nation: Conservative Power in America (details or compare prices) presents a British perspective on the distinct features of U.S. style conservatism, and, although it notes the cleavages between the cultural conservatives and the libertarians, the chapter titled "The Melancholy Long Withdrawing Roar of Liberalism" ought to be read and understood by advocates of the left turn for the Democrats or the Republicans.

(As an aside, and completing the comparisons: Right Nation also offers a better treatment of the vast right wing conspiracy financed by five families than Kansas. The money from the Kochs, Bradleys, Scaife, and the like has been helpful, but without ideas and resonance among the voters the return on that investment would be small indeed.)
A CASE OF BUYERS' REMORSE? Professor Althouse, at her alt haus, (nicht Knoxville) notes the debut of the Wisconsin commemorative quarter with some reservations about the cow and wedge of cheese honored therein. Wisconsin residents had the chance to do a retrospective of the buffalo nickel but chose not to.
WANT TO GO RAILROADING? The job opportunities are there but be prepared to have your circadian rhythms disrupted.

But recruiting workers to fill those openings may not be easy. Though average pay for rail workers is about $62,000 plus benefits, the jobs can be trying.

"It can be a physically demanding job," [Norfolk Southern publicist Rudy] Husband said. "We move the freight 24 hours a day, seven days a week, 365 days a year - through hot days, rainy days, snowy days. So people are going to be outside working in the elements, and there are times that people are going to be working at night, weekends and holidays."

Other harsh working conditions make the job unappealing for potential hires, said [spokesman Frank] Wilner of the United Transportation Union. Many crews are forced to work without days off and with infrequent rest periods, he said.

What's going on on the rails? In part, it's a substitution induced by rising wages and fuel prices confronting the trucking companies. The railroads are doing the wholesale part of the truck delivery.
A recent study found that if one quarter of what is now shipped by trucks were moved by rail, commuters would spend about 33 fewer hours sitting in traffic each year by 2025. That is a savings of 174 gallons of gas per commuter each year, said Wendell Cox, a demographic and transportation consultant and author of the study, which was funded by a grant from North America's Freight Railroads.
The second-order effects on reduced traffic congestion are noteworthy.
CARNIVAL CALL. Step right up and see The Big Picture featuring the latest Carnival of the Capitalists.
CHASED TWO HARES, CAUGHT NONE. Business guru grasps the significance of this trope.

If you spend most of your day working on multiple tasks but still feel that you don't get enough done, your problem could be an excess of multitasking.

Frequent multitasking increases the probability of errors. It results in lost time and can lead to serious mistakes that can damage your career progress.

Whenever work on other activities pulls you away from the parts of your job you enjoy the most, you also miss out on the fun parts of your career.

Well, D'Oh!! But if you have to report to the manic multitasker from hell, read and understand the column, particularly the advice at the end.
HIGH-TECH NIGHTSOIL. Check out this Retro Milwaukee site. Take a ride on the Electroliner. And discover the truth behind the quirky title of this post. (If you play golf, the greens are probably maintained with this stuff.)
ACCIDENTALANCHE! Jay at Accidental Verbosity teases Jane Galt about "instapunditing" herself in the course of referring to Asymmetrical Information from Instapundit, where she is one of three pinch-hitters for Professor Reynolds.

He was also kind enough to provide two links to these pages. If you've followed those, welcome, and stick around. It's been a bit quiet around here but there will be new content fairly regularly.

24.10.04

END OF THE LINE. Want an insulated vacation home? Rebuild a refrigerator car. Park a caboose nearby. Be careful you don't fall out of the upper bunks in the cupola.
SO MUCH FOR FALSE CONSCIOUSNESS. Thomas Frank's What's The Matter with Kansas (details or compare prices) marvels at the willingness of Kansans left behind by the economy nevertheless voting Republican. I recently took issue with Robert Reich over the values issues motivating many of the Republican voters.

Two U.S. News columnists have recently sounded similar themes. Managing Editor Mortimer Zuckerman sees conditions that favor old-style Democrats.
Why aren't the Democrats way ahead? After all, the vast bulk of middle- and working-class Americans are being financially squeezed between slowly rising wages and escalating costs for oil, healthcare, and education, and the war on terrorism is seen through the prism of TV news on Iraq, which focuses on horrific pictures of terrorist violence.
Advantage, Donks? Nope. Ronald Reagan's quip about the Democratic Party leaving him captured a phenomenon writ large.
The Democratic Party should be riding a wave here. It has always cast itself as the party of the little guy, fighting against the GOP, the party of the wealthy. In the 1960s and 1970s, however, the Democrats began to focus less on economics than on social conditions. At a time of declining real wages, Democrats were seen to be more concerned with liberal social programs to promote the particular interests of blacks, gays, women, and other groups. This pushed a lot of traditional Democrats into the Republican column--construction and blue-collar workers, homemakers, military veterans, cops, evangelicals, rural residents, and many ethnics. When Jimmy Carter lost control of the American economy, producing some three years of double-digit inflation, Reagan's antitax, small-government message became appealing. The Reagan Democrats emerged, consolidating the wide disaffection of white working-class workers brought about by the Vietnam War and conflicts around race in the 1960s.
Meanwhile, the Democratic Party's base changed, Mr. Zuckerman argues. By their fruits shall ye know them.
Weary of the unraveling of the orderly, coherent, moral community they once relied on, Americans rejected the hedonism of Woodstock, in which individual choice and uninhibited, personal expression trumped all. Hollywood came to epitomize for them this narcissism and repudiation of conventional values. They were tired of the new counterculture of radical change, seeing in the New Left a contempt for middle America and its values, reflected in fathers abandoning their families, the delegitimization of the sanctity of marriage, raising children without clear moral guideposts--all of which, in their minds, led to increased criminality, drug abuse, people being recast as society's victims rather than accepting responsibility for their own actions. They yearned to restore the authority of public institutions and to remove some of the violence and sexuality in TV programs, records, and computer games, whose content they ascribed to the liberals who write the screenplays for TV and movies.
Mr Zuckerman has captured something that Mr Frank missed.
All of which goes a long way toward explaining the Republican use of cultural opulism to mobilize voters, exploiting explosive social issues like abortion--especially "partial-birth" abortions--gay marriage, school prayer, and guns. Recent polls by both Time and MSNBC/Knight Ridder indicate that the number of voters who are responding primarily on moral and family-value issues like gay marriage and abortion has increased to between 15 and 18 percent; in the most recent Time poll, George Bush is winning over the culturally driven voters by 70 to 18 percent, a margin that shifts the overall poll findings by as much as 7 or 8 percentage points toward Bush. This is true, as well, in the battleground states, where the GOP margin on social issues is critical. MSNBC's polling firm indicated some 12 percent in Pennsylvania and 16 percent in Missouri would pick moral and family-values issues as the most important in determining their presidential vote this year, and Bush's lead over Kerry among these voters ranges from almost 8 to 1 in Oregon to more than 10 to 1 in Ohio and more than 12 to 1 in Missouri.
That Democratic economic policies are based on canards and good intentions and not often effective also serves to rebut Mr Frank's thesis that people are voting against their best economic interests.

John Leo raises a point that Mr Frank also missed, namely the effect of Democratic tolerance of pacifist crazies on their old base.
The anti-Iraq-war demonstrations were a grab bag of contradictory constituencies, many of which had nothing to do with war and peace. But they held out the promise that the hard and soft left, by refusing to criticize each other, could form a powerful alliance. So ordinary Democrats raised almost no objection to the many hate-America themes at these marches. (Few liberals and almost no reporters mentioned that the rallies were organized by unreconstructed Communist-front groups and Maoist fans of North Korean dictator Kim Jong Il.) Some of the dumber themes--Bush=Hitler and no blood for oil--moved into the mainstream left. Many stars in the Democratic firmament praised Michael Moore's Fahrenheit 9/11, which carries some of these themes, including the belief that an evil alliance between the Saudis and the Bush family explains the war in Iraq.
The Superintendent's advice to Democrats: you cannot beat something with nothing, or hold out your hopes for a fracture between the libertarian and traditionalist parts of the Republican coalition. There are some interesting developments in local Democratic races, but that's got to wait for another day, as it's getting late.
SO LITTLE DONE, SO MUCH LEFT TO DO. I might have found an example of editorializing masquerading as news analysis. I know I have found some shoddy economic reasoning.
Four times since 2001, the U.S. Congress has rejected efforts to require automakers to build more fuel-efficient vehicles. Now, with oil prices soaring above $55 a barrel and gas at $2 a gallon, the U.S. is paying the price.

Raising fuel-economy standards by just 1 mile a gallon would cut U.S. oil consumption by 143 million barrels a year - or 16 days of imports - and save motorists $9 billion, the Environmental Protection Agency estimates.

"It was not a high priority for consumers when gasoline was cheap," says Maryann Keller, president of auto-industry consulting firm Maryann Keller & Associates of Greenwich, Conn. "Congress should have understood that there are economic consequences to higher energy prices."

The failure to raise fuel-economy standards contributed to an 11% gain in U.S. gas usage, to 370 million gallons a day in August 2004 from 332 million gallons in January 2001.
What is the elasticity of demand? Might the historic cheapness of gasoline over much of that time period had anything to do with that increase? And does that saving of $9 billion net out injuries and deaths that accompany smaller cars?
President Bush opposed congressionally mandated increases in fuel economy, saying through the Office of Management and Budget in May 2003 that it would force motorists to buy smaller, less-safe vehicles and reduce automotive jobs. The Bush administration is considering issuing its own new rules for fuel economy.

"The president's proposal takes a common-sense approach and a phased approach to getting greater fuel efficiency while providing the maximum safety for drivers and the maximum options for consumers," White House spokesman Trent Duffy said.
Right. Three maxima (on what criterion function?) involving choice variables that experience has shown involve tradeoffs between the two (lower mass implies less fuel use but more risk of injury) with the imposition of a constraint (average fuel economy) necessarily reducing options. Sheesh.
Congressional inaction on fuel-economy standards is a boon to such companies as General Motors Corp. and Ford Motor Co. because light trucks and sport-utility vehicles account for almost half of the autos sold in the U.S.

American automakers break even when they sell passenger cars and earn from $3,000 to more than $6,000 for trucks and SUVs, says David Healy, an analyst at New York-based Burnham Securities Inc. Trucks average one-third fewer miles per gallon than cars.
And as gasoline prices rise, consumers are less prone to buy those more-profitable guzzlers. Does that mean the imposition of fuel-economy standards is a form of corporate welfare?
Meanwhile, automakers and oil companies such as Exxon Mobil Corp. have spent $522 million since Jan. 1, 1999, on lobbying and political donations, according to records filed with the Federal Election Commission and the secretary of the Senate.

The transportation and energy industries are among the top five political spenders among U.S. industries, according to the Center for Responsive Politics and PoliticalMoneyLine, Washington-based groups that track campaign finance and lobbying.
Big surprise. Fuel economy standards and other regulatory policies generate rents. Money spent to influence the allocation of those rents might yield high returns.
The government's 29-year-old Corporate Average Fuel Economy, or CAFE, standards require cars to average 27.5 miles a gallon; minivans and smaller sport-utility vehicles must average 20.7 miles. The standards don't apply to vehicles weighing more than 8,500 pounds, such as General Motors' Hummer H2.

Light trucks, minivans and small SUVs accounted for 48% of the 16.6 million vehicles sold in the 2004 model year, up from 19% in 1975, Environmental Protection Agency statistics show. They averaged 21.5 miles a gallon in 2004, compared with 29.3 for passenger cars.

The surge in popularity of SUV brands such as Ford's Explorer and Toyota Motor Corp.'s Lexus RX330 explains why the average miles per gallon dropped to 20.8 in 2004 from a record 26.2 in 1987, EPA statistics show.
How many times do I have to explain that if the standards didn't exist, production of more large family sedans and station wagons in numbers sufficient to accommodate families would remain legal? I suppose that's why I get paid; if policy makers got it right the first time, anybody could teach economics.
The Senate has voted three times since 2001 on energy bill amendments dealing with higher fuel-economy standards; the House of Representatives has voted once.

An amendment by Senator Richard Durbin, an Illinois Democrat, to raise fuel-economy standards for both cars and trucks to 40 miles a gallon was rejected on July 29, 2003. Senators also voted against increasing standards on March 13, 2002, and April 25, 2002.
The article provides no context for these votes.
The average price of a gallon of regular unleaded gas rose to $2.03 on Oct. 18 from $1.06 on Dec. 17, 2001, a 92% increase, Energy Department statistics show.

The price of a barrel of crude oil in New York doubled between Jan. 2, 2001, and Oct. 18, from $27.21 to a record $55.33. Gasoline and diesel fuel last year accounted for 57% of U.S. oil consumption.

Energy prices are affecting the economy. The Conference Board's consumer confidence index fell to 96.8 in September, from 98.7 in August. Wal-Mart Stores Inc., the world's largest retailer, said monthly sales increases have averaged about 2% since June, less than half the pace of the first half of 2004, as higher gas prices kept customers home.
Again, that's why I make the big bucks. I still don't see that unleaded regular at $2.73 a gallon.

Tyler at Marginal Revolution has some good economic thinking about energy independence.
HE JUST TALKED ME OUT OF IT. Senator Kerry gave the Democratic Party's weekly radio policy statement Saturday morning (when I find a transcript I will run an extra post providing the link to it.) His focus was on pay, and he repeated the canard from the third debate about women earning 76 cents for each dollar earned by men. He also raised an argumentum ad misericordiam involving single moms earning minimum wage as part of a promise to raise the minimum wage, and made reference to "pay equity."

Great. No point in doing any work on the returns to education or to labor force participation; that work will simply be dismissed (the Senator was scornful of one of President Bush's advisors who raised that point. That's why I want the transcript.) At the beginning of the Clinton administration, P.J. O'Rourke complained that we were being governed "by a dorm-room bull session." Correct, a bull session from the late 1960s or early 1970s, and those cliches had worn thin by 1992; they have not improved with further aging. We can look forward to a panel of Social Handicappers to work out the "comparable worth" of differing jobs ... or a lot of time lost in Congress debating such foolishness. And we might see some minimum-wage moms get a pay hike, and others let go (perhaps low marginal productivity includes having some slack cut for emergencies with the kids?)

What we'll also likely see is mau-mauing of anyone crass enough to ask what any young lady is doing making babies before she's acquired any skills. That tiresome "blaming the victim" argument is annoying enough as a common room conversation topic. I have no interest in seeing that sort of thinking become public policy.

Sorry, Senator Kerry, no vote for you.
UNITED STATES, NOT A UNITED MOB. Bill Whalen reminds readers of the purpose of the Electoral College. In its absence, here is his interpretation of what would happen.
Big states, with their large media markets, would dominate the fall campaign.

That would make for a tactical and stylistic change: presidential elections based more on mass marketing in urban areas than on retail political skills in rural communities.

Ironically, that’s the polar opposite of how the two parties choose their nominees: sizing up candidates as they go door to door in small towns in Iowa and New Hampshire.

Over the past 200 years, some 700 proposals have been introduced in Congress to reform or eliminate the Electoral College.

Instead, lawmakers should recognize the realities of these times: In the past three presidential elections, no candidate achieved 50% of the [popular] vote.

Although he did lose the popular vote by 0.5% of the national total, Bush nevertheless carried 30 of the 50 states, 228 of the 435 congressional districts, and 2,480 counties to Gore’s 674.

In this regard, the Electoral College narrowly chose a winner based on his performance as the candidate with broader national appeal.

Come to think of it, it is a national election, not a regional choice.
Does it make sense to assign electoral votes by Congressional district, with two at-large delegates to be assigned based on the voting by districts?

23.10.04

FIREWORKS. If the offense scores the first time it snaps the ball, doesn't that mean the defense has more work to do? Never mind that, there's another win for the Northern Huskies, this time by 59-38 over Western Michigan. At halftime, the score was 42-17; reserves saw a lot of action in the second half. To the North, Wisconsin's Badgers avoided the letdown against Northwestern, prevailing 24-12.
A QUOTE FOR THE CENTURY.
Sources of individual or social decay are sometimes most dangerous, when they are associated with great achievements, and rich benefits.
That's Alfred Marshall, in Industry and Trade (which is still in print). A book review I am working on made reference to this work, and as several other related books also made reference to it, I took it with me on a quick Hiawatha ride (one can never take too many train rides) and started reading through it. It is astonishing how many things haven't changed in the 80 years since this book was written, and there will be more observations on it to follow.

The train? Ten minutes early northbound, close to time southbound despite an unexplained stop near Pleasant Prairie, and the Milwaukee airport station is going to be a fairly substantial structure set well back from the tracks in the contemporary fashion.

21.10.04

MARGINALIZING THE DISSENTING VOICES? The Illinois League of Women Voters will present a debate between Senatorial candidates Barack Obama and Alan Keyes, to air on WLS-TV, Chicago's channel 7 and on several other television and radio stations. Libertarian candidate Jerry Kohn, a member of the Illinois Association of School Economics Teachers, was expecting to participate earlier this week, but he has since circulated an email (I received it by virtue of my membership in the Association) noting that he has been disinvited. The fine print in the League's debate announcement (also in the current Google cached version) suggests that he, and Green Party candidate Albert Franzen, did not qualify.
Representatives of all of the campaigns met with the League and ABC 7 in September to discuss the date, format, and participation guidelines for the debate. At that time, the candidates' representatives agreed, in writing, to the League's Candidate Participation Policy. This policy included a requirement of demonstrated voter interest "as evidenced by receipt to ten percent (10%) of support in one or more statewide nonpartisan public opinion polls conducted not more than thirty days prior to the election (October 3, 2004) and at least five days prior to the debate." Mr. Keyes and Mr. Obama have met the requirements set out by the policy and will participate in the Thursday debate.
Mr Kohn is claiming that Ambassador Keyes favored his and Mr Franzen's participation. As Drudge would write, Developing ....
A GREAT AFTERNOON FOR A WALK AROUND CAMPUS. A colleague who is relatively new to the university got a good look at the west campus. I don't have one of those fancy digital cameras, but University Media Services have kindly provided the images.



We didn't walk quite this far west.





The leaves are about at this stage of turning.



Sorry, we don't offer degrees in wizardry.

PREPARING FOR YOUR ECONOMICS EXAM? Everything you need to know to understand what's going on, on one poster.
CALLING FOR MORE ECONOMIC LITERACY. Russell at Cafe Hayek is unimpressed with a recent Washington Post article purporting to explain why there are "only" two domestic manufacturers of flu vaccines. One gets the sense that the article is a complete waste of time:
We're now a little over halfway through the article and we have four reasons for why so many producers have exited the market. But all of these reasons were there five years ago when there were four producers and I'd guess that most or all of them were there 30 years ago when there were over a dozen producers. None of the reasons given have anything to do with anything that's changed recently that has made vaccine production increasingly less attractive.
And his conclusion is depressing.

The bottom line: the vaccine business is less attractive than it used to be. If we want to make it more attractive, either prices have to rise or regulations have to relax. My guess is we're going to end up with more government involvement not less.

A market-based economy is hard to sustain unless people understand how it works.

Kevin at Truck and Barter has been looking at Canadian drug production, and Canadian purchases from U.S. manufacturers at reduced prices, which U.S. patients are now attempting to exploit.
Why politicians think a country of 31 million people that has price controls on pharmaceuticals has enough excess drugs just sitting around that the US can start shopping like Paris Hilton on a bender is beyond me. I'd consider this a smart move on the part of these pharmacies. On the other hand, of course, this just means that those pharmacies that will sell to the US are going to be able to demand higher prices. If enough places adopt the no sales policy (to swing once again the other direction), the prices for those drugs that are available may rise to near-US levels, eroding the benefit. (Does anyone know if the price controls in Canada apply to international sales? I couldn't find anything in a quick search.)
It occurs to me that we might be seeing a variant of the peak load pricing phenomenon (there is a wonderful article by Oliver Williamson that appeared in the American Economic Review in 1966, and it's still worth reading and understanding. Sorry, I didn't turn up an online presentation of the argument. If one exists, please advise.) U.S. drug consumers are paying a price that reflects the costs of expanding capacity, while Canada's health ministry is able to negotiate a price that covers only the incremental cost of the drugs, by playing one producer against another. But if sufficiently many U.S. consumers start buying drugs from Canada, that has the effect of shifting the peak.

There are several posts at Truck and Barter on vaccine shortages and drug prices. Head over and have a look.

20.10.04

PRESERVED AS IF IN AMBER. Now that I have brought up the queries of my colleague, perhaps this is a good time to address another one. Once again, debunking a popular myth takes a lot of work, much of it simply to demonstrate the untruths that have become commonplace. Then there's the little matter of false analogies. The question, first. We are offered an example of a government program that my correspondent views as a success.
THE SALK VACCINE: The Salk vaccine was developed to deal with the growing number of cases of Polio in the 1950s. Development of the vaccine, I believe, was majorly if not entirely supported by the federal government. Dissemination of the vaccine once developed involved public institutions * e.g., the schools * in a government coordinated/government funded program. The result? The specter of Polio disappeared from the experience of America's subsequent younger generations.

Where is the equivalent program today that would wipe out childhood hunger? Or, is there evidence to the contrary that "there is no need for such a program; the private sector will produce those same results without government interference" as conservatives claim?
Let's start with a few salient facts. First, the development of the Salk vaccine involved private philanthropies, most significantly the March of Dimes. There is a reason President Franklin Roosevelt's head is on the current dime and that the current fundraising campaign against birth defects (the survival of the organization being more important than the cause) starts on January 30 of each year. And although schools participated in the immunization of kids, both with Dr Salk's shots and Dr Sabin's later sugar cubes, many kids got their shots from their family pediatricians. But that's nitpicking over facts.

Second, let's look at that loose talk about "equivalent" [government?] programs. What you are seeing, dear readers, is an example of the false analogy I call the "going to the moon" argument. The argument runs something like this. The Apollo program spent about $24 billion in 1969 dollars to land two men on the moon and safely return them to earth. So ... pick any other problem that looks like it could be fixed if the national government threw, say, $24 billion at it, and assert, "If we can put a man on the moon, we certainly can achieve these results." Compelling, huh? Here's the rub: a moon shot is a straightforward optimal control program. There is so much mass to be accelerated to a known escape velocity, steered to the proper path, decelerated to a safe landing velocity on the Moon, accelerated to a lower escape velocity (the savvy reader will note the use of expendable boosters and orbital velocity achieved first, then a translunar or transterran injection, that gets rid of a lot of mass and burns off a lot of fuel) and then decelerated to a safe splashdown velocity. The polio vaccine problem had much in common with a moon shot, as one vaccine worked reasonably well (although not without some tragedies and false starts) against polio.

On the other hand, flu vaccines, which Dr Salk also worked on, must be tweaked every year to deal with the latest mutation of the most dangerous influenza virus, and there is a bit of guesswork involved in manufacturing sufficient vaccine to treat that strain. And there is some legal fallout from the development of the polio vaccine that influences the production and distribution of the influenza vaccine. Here are some excerpts from a William Tucker article that Craig Newmark recommended.
With vaccines, there will be allergic reactions and a tiny but predictable percentage of people will suffer some kind of permanent damage or even die. Because of liability without fault and the generosity of the tort system, the result is huge damage awards.

The first instance of this came in 1955 with polio vaccinations. Cutter Laboratories, the California company that now distributes Cutter's Insect Repellent, made an early batch of vaccines, some of which had live viruses in them. Almost all the children in Idaho were administered the vaccine and several dozen contracted polio. In 1957, the parents of Anne Gottsdanker, an 8-year-old girl whose legs had become paralyzed, sued Cutter, with famed personal injury lawyer Melvin Belli representing them.

The jury found Cutter's actions were not negligent--the orders had been rushed, standards had not been clear, and safety precautions were still rudimentary at the time. But, using the new doctrine of liability without fault, the jury held Cutter accountable anyway and awarded $147,300. "That decision made Ralph Nader possible," Belli later claimed.

"It was a turning point," says Dr. Offit, whose book The Cutter Incident will be published next year. "Because of the Cutter decision, vaccines became one of the first medical products to be eliminated by lawsuits."

That this would be the outcome wasn't immediately clear. Soon after the trial, the Yale Law Journal published an article arguing that insurance against adverse reactions was the solution. The public wouldn't buy policies because it would be too complicated and expensive, but vaccine makers could. Insurance would cover the cost of bad outcomes and the manufacturers would pass these costs on to their customers. Those few who were harmed by a vaccine would be covered by those who benefited. Everything would work out. Unfortunately, this thesis failed to anticipate how high damage awards would go.

WHEN AN UNUSUAL EPIDEMIC occurred at Fort Dix, N.J., in 1976, for example, the federal government decided to vaccinate the whole country against the new "swine flu." To the astonishment of Congress, the insurance companies refused to participate. Senator Ted Kennedy charged "cupidity" and "lack of social obligation." The Congressional Budget Office predicted that with 45 million Americans inoculated, there would be 4,500 injury claims and 90 damage awards, totaling $2 million. Congress decided to provide the insurance.

As Peter Huber recounts in his book Liability, the CBO's first estimate proved uncannily accurate. A total of 4,169 damage claims were filed. However, not 90 but more than 700 suits were successful and the total bill to Congress came to over $100 million, 50 times what the CBO had predicted. The insurance companies knew their business well.
Looks like in this second case the private sector assessed the risks better than Senator Kennedy did. Did the government-sponsored swine flu shots (I passed on that one, as I have on all the other ones since then, there's a theory of public finance story to tell in another post ...) crowd out an insurance effort. Or, did the immunization program produce inefficiently many immunizations? (The efficient immunization rate is less than 100% even in the case of shots without side effects.)

I put it to you: if a government sponsored immunization program is not an easy technocratic fix, by what leap of logic can you look for an "equivalent" program to address childhood poverty, where the root cause might be a teenager who couldn't keep her pants, on or a mother widowed because her husband died in a UN peacekeeping operation somewhere, or a father was deserted by a wife who decided to explore a different sexual identity, springing the Two Income Trap, or a host of other stories? It has less to do with some ideologized free market alternative than it does with the lack of an easy technocratic fix.
EDIFICE COMPLEXES. The editorial board at the Northern Star puts the cost shifting problem into perspective.
Among every college student’s essentials are books, pens and, of course, paper. Somehow, a building dedicated to graduates just doesn’t make the list.

Information Technology Services’ inconvenient new card-swiping system, designed to regulate the amount of paper used in the computer labs, would not be needed if NIU got its priorities straight.

If this university’s budget doesn’t have room to expand the funds it spends on paper, perhaps NIU administrators should be encouraging NIU alumni, such as Dennis Barsema, to make donations for paper - an education must - rather than $2.5 million toward an alumni center that students won’t step foot in until years down the line, when they are alumni.

Students pay about $10,000 a year to attend school here. Nowhere in the tuition bill does it state that the price of attending NIU does not include paper.
Their proposals become anticlimactic, although the students do have a point. The problem, however, is that there are no naming opportunities for paper bins. Buildings and rooms are another matter.
AND ON THE LIGHTER SIDE:



(Hat tip: Shot in the Dark. The title Mitch gave to the .jpg is priceless itself.)
GOING LIKE A TRAIN AFIRE? Passengers on the 20.06 Bristol TM - Weston had to evacuate a burning train near Blackwell Common (hat tip: Transport Blog.) Passengers also had to evacuate the 19.20 Chicago - Boston and New York near Gypsum, Ohio around 2 am when the dormitory car caught on fire.
POSSIBLE SOURCE OF COMPANY MAIL? Instapundit has turned up an antitrust law professor's weblog.
HEARING THOSE JACKBOOTS. Edgy art student creates a painting that has the f-word in it. Somebody scratches out the word with crayon or charcoal, damaging the work beyond repair. Excessively earnest faculty member gets, well, excessively earnest.
NIU assistant art professor Karen Brown said the vandalism was a shameful act.

“It speaks to an incredibly regrettable immaturity on the ability of other people to tolerate ideas on which they do not agree,” Brown said. “That’s what the rise of fascism looks like, with the utter inability to tolerate the expressions of other people.”

Brown called Dudko “one of our very best students” and said her works were validly provocative.

“Her work is incredibly beautiful,” Brown said. “It’s the direct experience of her own life.”
I'll withhold judgement on the aesthetics. As long as the art faculty do not judge derivations for their elegance or their provocativeness, we have a proper division of labor. But let me remind readers that there is a non-discrimination and harassment policy at Northern Illinois University that specifically prohibits "discrimination or harassment on the basis of race, color, national origin, sex, religion, age, [my emphasis] physical or mental disability, marital status, veteran status, sexual orientation, political affiliation, or any other factor unrelated to professional qualifications. Consistent with the importance of these objectives, the university maintains an accessible, diligent, and responsive complaint resolution system." Perhaps the miscreant who censored the painting was not aware of channels for official redress. But the painting appears to be actionable under the harassment provision of the policy, which reads prohibits
Harassment in the workplace that is based upon the employee's/student's protected characteristic and;

  • Creates or is intended to create an intimidating, hostile, offensive working environment;
  • Unreasonably interferes with work performance.
  • And edgy art is occasionally deliberately hostile or offensive.

    On the other hand, perhaps the tramp of jackboots is in this harassment policy itself ...
    EMPRESS MARIA THERESA HAS SPOKEN. OR NOT.
    Well, you know, I don't know Laura Bush. But she seems to be calm, and she has a sparkle in her eye, which is good. But I don't know that she's ever had a real job — I mean, since she's been grown up. So her experience and her validation comes from important things, but different things. And I'm older, and my validation of what I do and what I believe and my experience is a little bit bigger — because I'm older, and I've had different experiences. And it's not a criticism of her. It's just, you know, what life is about.
    But the Empress got caught out.
    I had forgotten that Mrs. Bush had worked as a school teacher and librarian, and there couldn't be a more important job than teaching our children. As someone who has been both a full time mom and full time in workforce, I know we all have valuable experiences that shape who we are. I appreciate and honor Mrs. Bush's service to the country as First Lady, and am sincerely sorry I had not remembered her important work in the past.
    Can you say "elitist liberal?" Next she'll say baking cookies is for the little people. (Hat tip: Charlie Sykes, who was on a roll this morning comparing the Kerry campaign with some second-guessing of embattled Packer coach and general manager Mike Sherman. Paraphrasing: "Mr Sherman should have known that Ahman Green had a tendency to fumble. It was a mistake to give him the ball on the Chicago one. I would have called a different play. And scheduling the Bears at Lambeau in September was the wrong game in the wrong place at the wrong time." A caller noted that any contender for Mr Sherman's job could vote for funding the renovation of "Lambert" field. Before he voted against it, of course.)
    RENDER UNTO CAESAR. Skip at The Sports Economist finds parallels between medieval cathedral building and postmodern stadium building.
    We are wealthier these days, and can afford some degree of state-sponsored extravagance when it comes to building stadiums. But I find the cathedral cost story compelling. And the principle remains the same centuries down the road -- the opportunity costs to resource mis-allocation are real, and potentially quite large.
    But who is to be the Martin Luther to challenge the selling of indulgences -- or is it overpriced braaaats -- for the renovation of Lambert Lambeau Field
    DEBUNKING THOSE CANARDS. Arnold at Econ Log invites readers to identify the myth about Social Security that poses "the largest barrier to a reasonable discussion of policy." That's a difficult question to answer, as I have two. The first is the paternalistic canard that individuals will mismanage or tap into their private accounts. Brad DeLong is among the recent purveyors of this canard.
    There is a bigger, unmentioned reason to be against private accounts. Ten years down the road or so, there will be pressure on Congress to allow people to borrow against their private accounts, or to withdraw them to buy a house, or to use them to meet unexpected medical expenses. Congress will bow to that pressure--it's their money, after all. And in the end a lot of people will hit 70 having drained their Social Security private account dry. The rest of us will then have to decide whether to let them starve on the street, or tax ourselves a second time to give them Social Security benefits. As Dick Schmalensee says, "You have to ask yourself not just, 'Is this good policy?' but 'Will this still be good policy after Congress does its worst to it?'" The Medicare drug benefit and the corporate tax boondoggle are powerful evidence that the Bush administration holds no leashes to use to control what this Congress does to policy proposals, while lobbyists can make this Congress roll over and beg.
    The problem, Professor DeLong, is that a lot of people are going to hit 70 only to discover that multiple Congresses have drained the so-called trust fund dry. (For years, the excess of Social Security tax revenues over current expenditures have masked the total operating deficit of the national government. And to invest those excess revenues in government bonds does nothing to change the story. There have to be sufficient general tax revenues coming in to redeem the bonds to provide the transfer payments to the retirees who put their trust in the house that Franklin built.) Tyler at Marginal Revolution has thought through the laws of conservation at work in changing the retirement plan.

    But the canard that does more to poison debate than any other, now that I think about it, is the canard that Social Security and its later cousin Medicare have alleviated poverty among the old. A colleague sent an email around to several people asking them to comment on his defense of several of the New Deal - Great Society programs.
    I've been harping on the need to be specific in political debates so we can test our assertions and learn from each other. As one might guess, I've been challenged (off-line) to put-up-or-shut-up; specifically, to specify some "liberal" government programs that have worked rather than simply react to others' perceived vagaries about the ineffectiveness of government. I will do so citing three programs: the G.I. Bill, development and dissemination of the Salk vaccine, and Medicare.

    [I have cut out the material on the G.I. Bill and the polio vaccines to conserve space. These are different canards. The problem with a lot of policy analysis is the existence of things people believe to be true that after further review turn out not to be quite that true]

    MEDICARE: Enacted in the 1960s, Medicare has been credited with changing the demographics of poverty in America. In the 1950s, the segment of the population most disproportionately poor were older Americans, much of their lack of resources being due to the impact of hospital and other medical expenses. Today that segment of the population is among the disproportionately richest, having been replaced in poverty by children.

    Where is the equivalent program today that would ameliorate childhood poverty to a similar extent? Or, is there evidence to the contrary that "there is no need for such a program; the private sector will produce those same results without government interference" as conservatives claim?
    Perhaps there is yet another answer: there is more childhood poverty today because Social Security and Medicare have reduced economic growth compared to what it would have been with a different tax regime. Martin Feldstein has worked on this topic for years. There is also a paper by Alan J. Auerbach, Jagadeesh Gokhale, and Laurence J. Kotlikoff called "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy" (requires J-STOR privileges) in the Winter 1994 Journal of Economic Perspectives that illustrates the extent to which the current crop of elders are stealing from future generations. (I am being a bit polemical but it's late and Blogger hasn't been working well, so I have to take out my wrath on something.

    Here is a table of net tax rates by their reckoning, broken out by year of birth, from page 86 of the article.
    1900.....21.5
    1910.....24.7
    1920.....26.3
    1930.....28.1
    1940.....29.3
    1950.....30.6
    1960.....32.1
    1970.....33.2
    1980.....33.8
    1990.....33.6
    Their estimates suggest future generations will face a net tax rate of 71.1 percent.

    A companion article, by Robert Haveman, argues that identifying only taxes and transfers, without allocating the benefits of other government services (does that include liberating Iraq, or edgy National Endowment projects?) is incomplete accounting. True enough, but the evidence with respect to taxes and transfers alone suggests that the retirement safety net has been a massive transfer from future young people to current old people, and it has reduced economic growth compared to what it might have been.

    RUNNING EXTRA. More, much more, around the Internet this morning. Start with Alex at Marginal Revolution, looking at the microeconomics of Social Security privatization. Consider this:
    Social security privatization has a little-discussed benefit, done properly it is equivalent to a cut in marginal tax rates. A problem with the current system is that there is little relationship on the margin between taxes paid and benefits received.
    That's what makes Social Security so popular with the current crop of elders. They've made out like bandits starting with that Vermont pensioner who received the first check. But I use the term "banditry" deliberately: they have stolen their grandchildrens' futures. There will eventually be no more future to steal. We can do better:
    To see why this is important consider the difference between social security and an IRA. If a worker works an additional hour, earns $10 and puts $1 into the IRA he knows the $1 will produce a benefit 30 years down the line when he retires. The $1 contribution to the IRA is not a tax, it's consumption, a benefit of working extra hours. On the other hand if a worker earns $10 and $1 is taken and paid into social security there is no clear connection to retirement benefits. Social security payments, therefore, are taxes - and like other taxes they deter work effort and create a dead weight loss.

    Privatizing social security, or in some other way creating personal accounts, would reestablish a link between marginal payments and marginal benefits and thus would be equivalent to a cut in tax rates.
    Efficiency with prosperity. I like the idea. Victor at the Dead Parrot Society has an observation that is neither deceased nor defunct.
    By funding the transition costs with debt today, you are working the time-consistency problem in reverse; you are acknowledging that future, implicit, debt obligations are real, today. That is a good thing that helps to work toward fiscal sanity rather than away from it. The time-consistency problem arises from fear that such an acknowledgment would *not* ever take place. Lastly, the spending record from FY1999-2002 was reasonably terrible, and it is no coincidence that budget surpluses were on the books for those years. PAYGO was born in a period of massive deficits; it was essentially eviscerated when those deficits went away (and explicitly dropped without substantial concern just when surpluses were falling into deficits). Now that large and explicit current deficits are being incurred again, there is considerable movement in the Congress to reinstate PAYGO or other similarly tight spending caps and arrangements.
    To repeat, there is no more effective "lockbox" than a real trust fund account with a real name on it, not something that Congress might deal with or not. And there is time to work on the problem, particularly with generous immigration policies to expand the pool of workers, producing both more income and lowered per capita transition costs. Note this observation from Factcheck.org (via Charlie Sykes.)
    There are a host of unanswered questions about Bush's intentions regarding Social Security, and the campaign so far hasn't shed much light on any of them. Bush has said he wouldn't increase payroll taxes, but maintaining benefits for current retirees while allowing some portion of current payroll taxes to go into privately owned accounts will cost at least $1 trillion and perhaps much more, depending on what estimates are used. Bush hasn't said where the money would come from.

    Kerry, on the other hand, hasn't said how he would preserve the current system. Social Security's finances are unstable, and its trustees stated in the most recent annual report that by the year 2078 it will require a payroll tax increase of nearly 50% to maintain the currently scheduled rise in benefit levels. If taxes are not increased and no other changes are made, benefits would have to be cut 32% that year.
    Perhaps there are other economies for the national government to consider (where is that Pig Book when you need it?) And now might be the time to contemplate that. Michael Barone has laid out the options in the upcoming election.
    Bush can be justly criticized for not laying out his plans with much specificity. As on Medicare-prescription drugs, he seems content to raise the issue and let Congress -- especially House Ways and Means Committee Chairman Bill Thomas -- work out the details. Nor is it clear that any significant number of Democrats would support Bush on health savings accounts or Social Security. A re-elected George W. Bush may or may not be able to deliver on his promises.

    But he has at least set out a vision of an "ownership society" that is a vivid contrast to what John Kerry proposes. Kerry, like most Democrats since the 1970s, aims to move this country some distance toward a Western European style welfare state. (His proposals would result in government spending an ever larger percentage of gross domestic product far into the future. Leave aside the question of whether his tax increase on the highest incomes would pay for this.)

    The (larger) question is whether the United States wants to become a society with the problems of Western European welfare states -- zero job growth, stagnant economies, ever-increasing shares of GDP spent by government.

    Industrial economies, with their huge firms and masses of low-skill workers, had a natural tendency toward centralization and government redistribution of income: hence the New Deal, the Great Society, the Western European welfare states. Post-industrial economies, with their burgeoning small firms and churning technological innovation, have a natural tendency toward decentralization and market distribution of resources.

    The vision Kerry presented in the second and third debates, of further centralization and growing government, seems more in line with the industrial era. The vision Bush presented, more effectively than he has before, is more in line with our post-industrial times.
    Perhaps so. But perhaps Daniel Henninger is correct: not everybody is ready to go there yet.
    FOURTH TURNING ALERT. That's how Charlie Sykes sees the upcoming election.
    It is said that America's WWII generation is its "greatest generation." But my greatest fear is that it will become known as America's "last generation." Born in the bleakness of the Great Depression and hardened in the fire of WWII, they may be the last American generation that understands the meaning of duty, honor, and sacrifice. It is difficult to admit, but I know these terms are spoken with only hollow detachment by many (but not all) in my generation. Too many citizens today mistake "living in America" as "being an American." But America has always been more of an idea than a place. When you sign on, you do more than buy real estate. You accept a set of values and responsibilities. This November, my generation, which has been absent too long, must grasp that 100 years from now historians will look back at the election of 2004 and see it as the decisive election of our century. Depending on the outcome, they will describe it as the moment America joined the ranks of ordinary nations; or they will describe it as the moment the prodigal sons and daughters of the greatest generation accepted their burden as caretakers of the City on the Hill."
    The weakening actually began with the next-elders to the Baby Boomers, who remembered the winning years of the Second World War and came of age at a time to capitalize on the prosperity. Now they are overrepresented in the ranks of the smug pacifists (hat tip: Atlantic Blog) as the first commenter to the post noted. And they vote in sufficient numbers to keep any administration from coming to grips with the chain-letter known as Social "Security."

    On the other hand, Andrew Sullivan is in the position of contemplating which of the two major presidential contenders is the lesser evil, while King at SCSU Scholars argues it is crucial for voters to recognize which contender is more alert to the greater evil.
    THE JOYS OF SHODDY SERVICE. Northern Star columnist Kimberly Marion has some suggestions for store clerks.
    What I want is a little respect. Do not place the blame on me because you are at a job you dislike.

    What’s even worse is when there is a line of people waiting to order and the person behind the counter holds an entire conversation about what he or she did on the weekend. I am not asking you to fan me and put peeled grapes in my mouth, and I am also not asking you to you to cut my meat and dab the corners of my mouth. All I want is the order I politely asked for.

    I do recognize that there are some customers who have the tendency to be rude, but there still must be some type of polite customer service. You could think about it in a different manner and ponder where you would be without the job you have. I know where you would be: You would be broke, just like me.
    There's probably a whole 'nother column on the antics of what radio talker Clark Howard calls the "customer no-service representative" at the credit card companies. But not tonight. I scored a minor victory over the telephone companies. I think there is a previous post to follow up on, but the archives aren't working properly at the moment.

    19.10.04

    THERE IS STILL WORK TO BE DONE. Northern Illinois University President John Peters referred extensively to something called P-20 in his recent State of the University Address.
    But we have gone further – so much further, in fact, that five of our deans were called to Boston last month to tell educators from across the country how NIU has managed to create a national model for school-university partnerships. Under the umbrella of our highly-successful P-20 (or preschool through graduate school) program, five different colleges are working together to improve teacher training, raise student achievement, and smooth transitions across the public education system at every level. Can you imagine? A program so important that five deans came together to work across college boundaries on a singularly-focused initiative? Don’t look now, but I think I just saw some of the plaster heads smiling!

    Here are just a few examples of what P-20 has accomplished so far. They’ve planned, opened and are helping operate an innovative new elementary school where the fine arts and technology are integrated into every subject. They developed an interactive school report card to help parents and school administrators make sense of voluminous standardized testing data. This is a product, by the way, that’s now available to 4,000 public schools in Illinois! The P-20 team obtained a five million dollar federal grant to work with struggling schools in Rockford.

    The list goes on and on. In all, NIU’s P-20 program has obtained more than $7.5 million worth of federal support in less than a year-and-a-half, and they have another $15 million in the development pipeline right now.

    Nor are they laboring in obscurity on these programs. NIU’s P-20 initiative is making headlines across the state and around the nation – so much so that P-20 faculty and staff are fielding calls for help from school districts around the state, each and every day! In fact, on the strength of our growing reputation for P-20 leadership, I spent Monday and Tuesday of this week in Washington – at the invitation of U.S. Secretary of Education Rod Paige – to discuss with a small group of university presidents how to improve math and science education in our public schools. It is no coincidence that, in looking around the country for leaders in teacher preparation and school-university partnerships, Secretary Paige would choose NIU to help advise him on national education policy.
    That's interesting. The more salient statistic might be the absence of any preparation for university in the P-12.

    Joanne Jacobs has the money quote.
    Nearly half of high school students don't take the academic courses necessary to prepare for college.
    That lack of preparation also takes its toll on our graduate assistants.
    If more people are going to college than ever before....shouldn't we expect the marginal ones to be glue sniffers? But I think we know that we're not talking about a marginal one or two people here. At least that's the way it seems.
    There are several links to main press coverage of the college scene at that post. Check it out.
    ONE ABANDONED, ONE SUSPENDED. The Milwaukee - Muskegon catamaran ferry exceeded expectations for the summer, but will begin its winter break in November.
    But even after shortening its first season from seven months to five, the Lake Express has still exceeded its 2004 ridership projections, spokesman Jeff Fleming said. He wouldn't release those projections or a precise passenger count but repeated earlier statements that the ferry has carried more than 100,000 passengers between Milwaukee and Muskegon, Mich.
    Meanwhile, the Rochester-Toronto service (a public-private partnership gone wrong?) is done. Live from the Third Rail wonders if the boat will go to a route with passengers? The Superintendent has some transport gossip from the Milwaukee area to that effect...