Idle chit chat with Ryan G

Ryan is a friend of mine from Mason who is currently studying graduate Econ at Oxford. This is a conversation we had a few minutes ago.

Ryan: I am writing a paper on market failure, government intervention, Coase Theorem, etc...
Now I need to do an applied section where I walk through a real case any good ideas? I would do the obvious, environemnt, or education, but I will be doing seperate papers on those two topics next.
me: tragedy of the commons is the most frequent real market failure. so overfishing?
Ryan: yeah, thought of that
me: logging on public lands?
Ryan: hmmm, ok, that would be interesting
me: information assymetry is also good. You could do healthcare.
Ryan: That is a whole nother paper. I am already at 10 pages, I had to leave out dynamic incapacities, and asymentric info otherwise it would have taken me 15 -20 pages just to define the different problems
I think I may do a paper on Health care later, so hopefully I can deal with those problems then.
me: dynamic incapacities, is that like, how electricty gets overconsumed because it's so hard to have live pricing? Google isn't turning up much.
Ryan: i think so, i dunno. He defined it, but we didn't really spend much time on it
and I didn't know where to research for it My other thought were to do big game animals again
I wrote a paper on that a while ago.
Or public financing of sports stadiums which I also did a couple years ago

me: I thought public financing of sports was more of a public choice problem instead of a market failure. It's actually a market success that stadiums don't get built

Ryan: public choice deals with market failures. lol, true.

The usualy arguments for government intervention in markets is market failure

me: so the pub choice argument is that the lack of stadiums is a market failure, so spend public funds on them?

Ryan: Yes, becasue they give positive externalities to the city

such as increased jobs, city pride etc....

things the private world won't take into account

public choice would say rent seeking and government inefficiency would result so the stadium should be financed privately

me: I wonder how you would monetize city pride as a variable

Ryan: hard to

We still don't know too much about dynamic incapacities, so if you know anything, please leave a comment.

Reagan on the role of Government

Hat tip to Brian Hollar @ Thinking on the Margin
Who gave "(HT Stephen Bainbridge via Instapundit)"

Project Lifeline, Legislating Reality After The Fact

I recently stumbled a wonderful new project by our wonderful government called Project Lifeline.

Thanks to this wonderfully brilliant contribution by our governing officials, banks will actually spend 30 days negotiating with borrowers to resolve their loans before foreclosing on them. This is such a great idea in fact, that banks have been doing this voluntarily for years with no government involvement at all!

This is basically the banks borrowing the governments credibility (imagine!) because for some reason people trust banks less than they trust our 'fiscally responsible' government. When the banks call the homeowners asking them to refinance, people avoid the calls like the plague.

Posting Lull

I regret to inform my audience that my computer has died. :-(
I will probably have substantially fewer posts for a while. I'll still try to make 5 posts a week, but it will be harder.

A little note, It's bad to run Laptops 24/7. They're cooling systems usually aren't good enough to handle it.
Also, if your computer randomly shuts down quickly and without warning, wait 20 minutes before restarting it. It's probably over heated and needs to cool down.

For those of you interested, my new system will probably be similar to this:

Anon vs. Scientology UPDATE

Anon has released a new and particularly long video announcement.

The text can be found on Google Docs.
See my earlier post on this here.

Smurf Healthcare vs. US Healthcare

The Smurfs on Healthcare

My favorite part is how Jokey gets worse and worse as he gets more 'health care' from the other smurfs who 'just want to help.'
Here's Robin Hanson's take on health care at EconTalk. He talks a lot about the psychological effect about the act of providing health care. There's also a lot of research on information asymmetry, like donating a funny bone because the docter says your friend will need one.
Dr. Hanson talked about the RAND health experiment, where people who got free health care were compared to people who paid for all of their own health care. The comparison said that even though the free health care folks used 30% more health care, they got essentially zero health benefit. So all that extra money spent bought zero additional health. I recall Dr. Hanson asking class when I took his class at Mason,

"If you assume that some treatments are helpful, and on average, extra treatment buys no health, then doesn't that mean that some of that treatment hurts?"

Reminder of How Science Works

DNA Puts Itself Together 'Impossible'

In case anyone forgot, the world we live in is a wonderful place that the totality of human knowledge barely understands. The world contains matter and energy, they interact in ways that we can see and in ways that we cannot. Science is the process of seeing as much as possible and creating the best possible ideas to understand how all those interactions occur. Compared to the totality of the world, we're barely scratching the surface.

Bill and Hillary in 1970

This reminds me of pictures I've seen of my parents and their friends in the 1970's.

Second Life CIA

Concerns Over Online Economies as Breeding Grounds For Terror

U.S. intelligence officials are cautioning that popular Internet services that enable computer users to adopt cartoon-like personas in three-dimensional online spaces also are creating security vulnerabilities by opening novel ways for terrorists and criminals to move money, organize and conduct corporate espionage.

The CIA has created a few virtual islands for internal use, such as training and unclassified meetings, government officials said.

The CIA owns islands in Second Life! I'm glad I pay taxes.

Most virtual worlds are proprietary of some sort. World of Warcraft is owned by Blizzard Entertainment, Second Life is owned by Linden Labs, combined they constitute an estimated 22 Million users total, maybe 6-12 million of which are active more than once a week. For the time that they spend in these worlds, very few of their decisions are in any way affected by the laws of their respective real world governments. While the company has full access to all the data regarding chat, text, exchanges, etc.; the government can request that access.

Second Life gets more media attention because of real money that gets exchanged in that world on a daily basis. 18 Million Linden$ ($67 Thousand) was exchanged in Second Life this January. It is illegal, however, to exchange real money in World of Warcraft (it still happens though).

Tagged Blog Game

A friend of mine 'tagged' me, which comes with a challenge to post 10 random facts about yourself on your blog. So, at the risk of sounding digital diary-ish, here goes.

1. I haven't used Microsoft Word (except at work) for almost 3 months. I've used OpenOffice and Google Docs to do pretty much everything I need.
2. I haven't bought or downloaded any music for almost 6 months because Pandora plays everything I want to play without me having to mess with playlists or file storage.
3. In 4th grade I did a science project about growing bacteria in a petri dish and kept the jars till I left for college because whenever I thought about throwing them away, they just looked so cool!
4. My highschool was the Patriots, my college was the Patriots, so I rooted for the NE Patriots for the Super Bowl. It has nothing to do with any affinity for Boston or that team in particular, I'm just used to rooting for the "Patriots." I don't want this to lock me out of rooting against them later on, I might actually like some future team. Redskins are cool because I like Joe Gibbs.
   
5. Those who know me might like to know that my hair is short now. Like, real short.
6. I'm a Christian Jew who keeps Kosher because Jesus kept kosher because that's what the law says is good. I think that law applies to everyone, but how people want to live is up to them, and while I may be wrong about the law, I'd definitely be wrong to force other's actions.
7. The second part of number 6 is why I'm also a libertarian.
8. I've listened to every show of the Anthony Sinecoff Show, and while I don't agree with everything he says, he's a friend of mine that I'm glad to know and glad to see still active on the web.
9. I play World of Warcraft on the Earthen Ring server, PST to Donleo.
10. I'm a firm believer in not posting too much personal info about yourself online, like not giving more than 9 random facts about... um.

This is going to Preppy Kev, tg coffeebean, B Pennington, C Light, and Izzy.

Gretchen tagged me from Myspace.

Light Bulbs galore

I bought light bulbs today.
I bought 6, 2 energy smart 26 watt bulbs, and 4 soft white 100 watt bulbs.
I did this because I wanted to have the packages so I could make this blog post.

I came up with formula to figure the total cost of light to me. The energy bulb is 18% cheaper at my energy price. But most of that discount is raw bulb cost if I reduce the price of electricity to $.001, the Energy bulb is still 17.7% cheaper.



Here's the formula:

cost per bulb X number of bulbs used in year
+ Watts X Price of Electricy X Hours of usage
-----------------------------------------------------------
Total cost of light for the year

Results may vary based on prices in your area, but feel free to use my spreadsheet to lower your cost of light, these prices don't change much, so you could do it once and not ahve to do it again for a while.

Tim Hartford Talks Stock Picking

Tim Hartford as the Undercover Economist explains the absurdity of predicting the stock market by telling people he can predict which que will move the fastest. Hartford also apparently has no Wikipedia article, that needs to be fixed.

It seems to me that a key difference might be the perceived simplicity of a que vs. the perceived complexities of picking a stock. Most people who are in que have lots of experience being in ques, and know that nobody can predict which one will move fastest. They see the complex stock market, though, and see a few people doing extremely well and figure that it must be predicable.

Information Super-Highway

Somebody accidentally cut an undersea Internet cable off the coast of the United Arab Emirates, which disrupted Internet service in India by a great deal.

I didn't know there were cables spanning the Pacific! That's a lot of water. The description of the cable is amazing as well. 14 cm thick with several layers of steel wire mesh guarding a narrow (like, 1 cm) wide fiber optic core that actually carries the data. It would take some heavy equipment to break that.

Video Game Tax in New Mexico

New Mexico Proposes Video Game Tax to Punish Staying Indoors

But a coalition of groups, led by the Rio Grande chapter of the Sierra Club, is sold on the idea that outdoor education programs can inspire children in a way that video games and television cannot.

The coalition wants state lawmakers to create a No Child Left Inside Fund with a 1 percent tax on TVs, video games and video game equipment. The fund would help pay for outdoor education throughout the state.

Joseph Henchman says:

The fundamental purpose of taxes is to raise revenue necessary for programs, not micromanage people's decisions with subsidies and penalties. If a tax targeting video games is justified, it should be on the basis of actual negative externalities, not the whims of social engineers picking things they don't like at random.

For myself, I can say without ambiguity that I vastly prefer this type of policy to efforts to ban certain types of video game content. One advantage is that a direct tax creates a disincentive to hurt the industry.
More ambiguously though, I agree with the philosophy of government given by Mr. Henchman. While it's appealing to think that Parks'n Rec would be paid for by Gamestop, as a service, parks and rec should be paid for by people that use it, not by people that don't. People should want more outdoor activities, government should try to 'make them want' more outdoor activities.

Hat Tip to Joseph Henchman @ Tax Policy Blog

Tim Hartford on Colbert

Aston Martin vs Roller Blader With Jet Pack

Aston Martin vs roller blader with jet pack

Awesome video.

Freedom in the Image of God

Freedom in the Image of God

I just wrote this, it has something of the tone of a rant. And although I'm still in the same mood that I was when I wrote it, I think I like it.

To be truly free, is to accurately be the living breathing image of an all knowing, all powerful God that loves the people around him so much, he is willing to sacrifice his own flesh to help those people become more like himself.