Driving, much worse than nose-picking

From today's Post:

Motorists continue to grumble about record high gas prices, but a new study suggests there is at least one benefit: Fewer traffic fatalities.

...

Nationwide, traffic deaths last dipped below 37,000 in 1961. The number peaked in 1972, at about 55,000, and in recent years has hovered near 42,000, Sivak said.

High gas prices have changed the habits of commuters across the country. People are using public transportation, scooters and motorcycles, and working from home.

Lon Anderson, spokesman for AAA Mid-Atlantic, said he experienced the changes firsthand during a recent drive to Richmond. Traffic moved at a mere 70 mph.

"I can't remember when somewhere around 70 miles per hour was the average speed of traffic on 95," Anderson said of the interstate. "There are certainly many drivers out there who have taken some steps to reduce the amount of gas they are burning. . . . That is one of the few good sides to very high gas prices: That if people drive less, we're going to save lives."

But that's pretty important, life that is. And driving kills us in a lot of ways, from air pollution to unwalkable cities. Plus there are the other negative externalities which maybe don't kill us but detract from the quality of life, e.g. the isolating and anti-social nature of driving. I'm wondering why we have to wait for gas prices to curb this behavior. What happened to social disapprobation? Why is nose-picking in public not OK but driving is just fine, so long as you don't nose-pick while driving?

I believe it is because too many are confused about freedom, and particularly the connection between political and social freedom. We are too often willing to fight for social freedom, i.e. freedom from disapprobation, even at the expense of political freedom. Yes, this is a conservative position. It means I support Al Gore's disapprobation of driving, yet not his calls for government enforced higher gas mileage standards. Too many conservatives are not willing to make the trade off.

And too many libertarians don't even believe there is a trade off. Just more or less freedom. In fact, we can never be totally free. Instead, political and social freedom are substitutes to a large extent. This is why the socially restrictive Victorian era coincided with the greatest political freedom we've known, and the socially free 1960's coincided with the high tide of Marxism/Statism/Socialism.

But that's not to say there is no progress, or that libertarians are completely off base. Sometimes society gets more of both social and political freedom, and it is worth striving for. And I believe in constitutional guarantees of political freedom, precisely because politics is the most effective means of social progress. That is, many of our most unjust social traditions, e.g. slavery, ultimately had to be overcome in the political sphere. It took an Abe Lincoln to orchestrate emancipation. It took a Gandi to break down the unjust traditions of Hinduism. And maybe it takes an Al Gore or Obama or McCain to point out the injustice of environmental degradation. All of this entails political force, less political freedom. Without political power as the focal point, it seems social progress is terribly slow.

The bottomline is we must acknowledge the trade off, but favor political freedom over social freedom through heavy reliance on constitutional guarantees. Nose-picking is optional.

Starting over in New Orleans, Mancur Olson style

When I asked Paul Vallas what made New Orleans such a promising place for educational reform, he told me that it was because he had no “institutional obstacles” — no school board, no collective bargaining agreement, a teachers’ union with very little power. “No one tells me how long my school day should be or my school year should be,” he said. “Nobody tells me who to hire or who not to hire. I can hire the most talented people. I can promote people based on merit and based on performance. I can dismiss people if they’re chronically nonattending or if they’re simply not performing.”

Read the rest from the NY Times.

Also, the EIA looks into who's paying the bills in Denver.

The Olympics sells much better than the Capitalism

I'm watching 2 Americans and 2 Belgians play beach volleyball in Chow Yong Park. Why are so many countries willing to fully embrace and compete in the Olympics, historically a Western institution and still slanted toward Western sports and athletes, and yet unwilling to embrace and compete in the historically Western institutions of free trade, property rights, and the rule of law? We in the West get the gold either way, i.e. through path dependence, but the rest of the world is learning how to play beach volleyball instead of how to avoid famine.

Maybe we should introduce experimental economics as an Olympic sport.

The Story of Stuff with Annie Leonard

Here it is. She claims to have 3 million viewers, so let's try to nip this in the bud.

This is a neatly packaged montage of all the familiar Marxist-Luddite gripes, and still without any real solutions proposed beyond "sustainable development, get involved, click around." This will always be the case because it is an intellectual fraud, most useful for rallying political movements, which in turn destroy millions of lives (USSR, Mao's China, Nazis).

As for her gripes, she is right to blame pollution and externalities, but what she fails to realize is that they are ultimately caused by a lack of property rights, not capitalism, profits, corporations, consumption, greed, etc. If we paid the full cost of disposing of our garbage, e.g. through a private dump rather than having goverment take it away magically, then we'd consume less and be more careful with our refuse.

Child labor is a bit more complicated, since we're talking about countries where child-slavery is still OK. Those countries have a lot of problems, chief among them is poverty. Capitalism can fix that. It worked in Europe, it can work anywhere. That's not to say that moral pressure from the world community isn't effective, especially in the short term, but ultimately we must let these countries get rich through capitalism and free trade. And remember that perhaps the most important thing we trade is ideas.

(Hat tip to Sammy, who also pointed me to this gem, a guy discussing the Georgia-Russia war with peanut butter on his face.)

Anthony Bourdain and Ted Nugent

...make great TV. No Reservations is the best travel show I can imagine, the only one I can stand. From Anthony's blog:

I didn't seek Ted out, by the way. I was summoned. He called a while back, said we should make television together - -and then told me exactly how. When the Nuge says jump? You ask only "How High?" and "How much ammo will I need?" In TedWorld, by the way, it all makes perfect sense.

Here they are discussing the negative externalities of obesity.

I can't wait for next week's Tokyo episode.

New book about Teach for America

Relentless Pursuit by Donna Foote. Here is what the Weekly Standard says about it:

The last few chapters are especially fascinating for policy enthusiasts as they offer a hopeful look at the changes taking place in public education. TFA teachers at Locke launched a special "academy" within the larger school that was showing promising results. An important component of the academy was an extra period that allowed teachers to spend time with students in subjects where they needed extra help. The TFA teachers persuaded Locke's principal to call a teachers' meeting to discuss making the extra period a schoolwide reform.

When the TFA teachers made impassioned pleas to their colleagues regarding the need for more class time, the teachers' union rep coldly retorted: "If you guys want to work 20 percent more, and not get paid 20 percent more, then vote for seven periods." The teachers voted down the proposal to extend the school day by a 72-to-36 vote. (Interestingly, Locke students supported the idea of a longer school day.)

But the story does not end there. After the 2005-06 school year, several TFA teachers left Locke to start two nearby "Green Dot" charter schools where bureaucracy and union work rules would not be an impediment to student achievement. These schools immediately proved so successful that Locke's principal, Frank Wells, saw the light and decided to join forces with Green Dot. After a protracted struggle with the union, Wells was able to convince a majority of Locke's tenured teachers to sign a petition that would allow the school to convert to charter status. Last year the Gates Foundation provided $8 million to fund Locke's transformation into 10 small Green Dot charter schools, and the new Green Dot Locke campus opened its doors last September--minus 22 incompetent teachers Wells had long sought to get rid of.

My sympathy makes me nonexpressive

Will Wilkinson summarizes The Theory of Moral Sentiments:

We are naturally sympathetic. Of course, our sympathy is rather limited and weak. But because we are sympathetic, we sympathize with the weakness of others’ sympathy. So, being sympathetic to the limits of others’ sympathy, we mute the expression of our own emotions, so that others will not be made uncomfortable or burdened by their failure to connect fully with what we really feel. And, likewise, we appreciate it when others do this for us. A sympathetic person doesn’t put other people out. Observing many instances of this pattern of praise for the sympathetic accommodation of weak sympathy (”thank you for not asking me to be that sad for you!”), we produce a general rule. And then we apply it to ourselves and come to disapprove of freely expressing unmuted emotion even when alone — even though we are actually having our emotions and not trying to sympathize with them. Our natural sympathy, wedded to the general weakness of sympathy, generates an individual conscience that demands that we be no more emotional than other people are ready to handle. Therefore, stoic self-command is awesome. “It’s OK! Just let it all out.” Nonsense! Why would you so rudely embarrass yourself with your own emotions?

I hope my girlfriend is reading this.

What happens when politicians set prices

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels.

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Malaysia’s government incited public anger on June 4 when it raised gasoline prices by 40 percent. The prime minister, Abdullah Ahmad Badawi, announced the following week that he would retire, although he has since said that he will not do so until 2010.

Before adjusting the prices, Malaysia was spending 7.5 percent of its entire economic output on fuel subsidies, a greater share than any other nation. Indonesia follows with 4 percent.

China and India are up there too. Read the rest here. In other words, as a percentage of GDP, many Asian countries spend as much on fuel subsidies as we do on defense.

I can hear you getting fatter

The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.

The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused to allow him a vote on a proposal to ban the companies from lobbying or making political donations to lawmakers.

"We can't have the people who are supposed to watch over these organizations getting money from these organizations," DeMint said. "At least if we're going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let's stop this."

That is sad.

Jobs for experimentalists

Within the last three years, both Google and Yahoo have built in-house economics facilities of their own to work on such tasks as optimizing their keyword auctions, and dozens of other companies have turned to outside consultants for help on specific projects. EBay used experimental economists to develop a new seller-feedback system that wound up boosting the total value of goods sold on the site by 25 percent, according to the researcher who worked on the project.

Read the rest from Wired. The article mentions Vernon Smith, but alas not the ICES lab that he built at GMU, and where I'm a research assistant.

The real cause of the housing bubble

But one area in which Cindy McCain’s spending — and its impact on her husband’s lifestyle — can be chronicled is real estate.

Property records show that trusts and corporations controlled by her and her children spent nearly $11 million between the summer of 2004 and February 2008 on three condominiums in Phoenix and a pair outside San Diego.

Read more here. I guess the Austrians are right, bubbles are always caused by government.

The Metro monopoly keeps serving up laughs

Another question I asked my students was the following:
1) What kind of business is Metro? Are you happy with that? How could it be improved?

The answer of course is it's a sorry-ass government monopoly, which can only be remedied by competition. In the meantime it gets to do things like raise price way above marginal cost, pack people like sardines into rush hour trains, run non-rush hour trains rediculously infrequently, completely abandon bus schedules, put you on hold for hours when you call, run off the rails, open the doors while moving and on the side without a platform, run people over, and waste money on frivolous programs and excessive salaries.

Today's Examiner finds one more reason to laugh or cry or cry through the laughter:

A Metro station manager and a Metro custodian were arrested on prostitution charges after an undercover transit police investigation found they arranged sexual trysts for money from inside the Dupont Circle Metro station.

At one point the employees used the Metro loudspeaker system to facilitate an illicit sexual arrangement, according to police who arrested the pair last week.

I think H.L Mencken's statements on democracy apply equally well to Metro:

I report only that when the suckers are running well the spectacle is infinitely exhilarating. But I am, it may be, a somewhat malicious man: my sympathies, when it comes to suckers, tend to be coy. What I can't make out is how any man can believe in democracy who feels for and with them, and is pained when they are debauched and made a show of. How can any man be a democrat who is sincerely a democrat?

This post is dedicated to Rusty at Why I Hate DC.

Have some fun, shoot the gun!

Shooting guns is not fun for me, nor do I enjoy chainsaws, but I do believe we should be allowed to own them. Of course there should be restictions on what you do with them and where you use them, e.g. not near my ear. And everyone draws the line somewhere, i.e. no sensible person believes in a right to own nuclear weapons.

So I'm glad the Supreme Court has overturned DC's ban on handguns. That it existed for 32 years, during which time we were named murder capital of the world, illustrates how out of whack democracy can get.

Principles of microeconomics

I just finished teaching this as a summer school course at George Mason, my first time teaching. I had no idea what to expect, but I'm happy to report that I really enjoyed it. My students were fantastic. We covered 15 of the 16 chapters in Gwartney and Stroup's Microeconomics, an excellent introduction to the subject.

Here are some of the questions I asked on the final, and for which most students gave very good answers:

1) Why are wages lower for women on average?
Answer: Specialization in the household.

2) Is the lottery fair? Explain using the difference between procedural justice and social, or redistributive, justice.
Answer: It's voluntary so it's procedurally just, but it widens income inequality so it's not socially just. See Hayek's "Atavism of Social Justice" in New Studies. (Do you think voters and pols get this distinction?)

3) Why are gas prices so high?
Answer: Many reasons, including supply constraints from OPEC and Congress, inelastic demand, and government subsidies.

4) Why do theaters offer discounts to students and the elderly?
Answer: Price discrimination.

I also wanted to ask a question about the difference between inequality and diversity, but we didn't spend enough time on that.

Cristo Rey schools

The concept of having students work to earn their tuition was borne of financial necessity. Children like Muñoz are desperate to escape the gangs and low expectations of big city public schools, but few can afford the full cost of a private education.

Over the past decade, though, members of the Cristo Rey network have discovered that requiring students to work does more than keep tuition low. It teaches children that there’s life beyond high school, with its teen-centered obsessions on things that don’t matter. It teaches them that working hard can help them get ahead—a lesson students from far nicer areas than the Pilsen/Little Village neighborhood could stand to learn, too. The model has helped revive Catholic inner-city education, and it offers some lessons for education more broadly. Anyone can create one school that works. The Cristo Rey Network has hit upon one of the few education models that can actually be replicated with reasonable success. It seems to be working everywhere it’s been tried.

More from Doublethink.

In other education news:

1) How to kill charter schools

2) Privatized student loans