Wednesday, July 28, 2004

Iowa Enviromentalists Choose Air Over Water

Isn’t funny how crazy the free market can be sometimes? Yesterday’s Des Moines Register reported one case where those evil corporations that environmentalists often demonize are actually better for Mother Earth than self-sufficiency.

When you wash your car, you end up pouring thousands of chemicals into the sewer which, at least in Des Moines, doesn’t go to the water treatment plant. It leads to the rivers and streams. Even biodegradable soaps kill the fish and ruin the biosphere. BUT if you engage in the market and have someone wash your car professionally, the water is pumped to a treatment center where it is cleaned before being discharged into the environment.

Not willing to try to stop people from washing their own cars (or preventing popular fund raisers), environmentalists are leaning towards public education to solve the problem. I think that’s hilarious considering Iowa just joined a law suit with seven other states and New York City against five power companies because they’re contributing to global warming. Together, these five produce as much as ten percent of the nation’s carbon dioxide. The claim is these firms aren’t doing enough to ease over to cleaner sources of energy, like wind power.

Of course, making this change would increase the cost of energy, lessening consumption. Considering how important energy is in our lives, it seems logical to me that the electricity-intense activities easiest to substitute would be the first to go. Hmmmm. Could one of them be an expense involving a giant conveyor belt with a dozen spinning and washing apparatuses? Nah…

It looks like some environmentalists need a lesson in incentives.

Tuesday, July 27, 2004

I Want YOU! For A Good Time

Sex is a wonderful thing. Some people say that the family is the foundation of civilization but I’m going to go with knocking boots. It’s one of the few things everyone wants (with very rare exceptions) and everyone enjoys (again, with very rare exceptions). It’s next to impossible to have a conversation without referring to it, volumes of text and countless hours of television are dedicated to it and it even has a few networks.

So why haven’t Republicans—typically the more troop-supporting of the two major parties—called for supplying our troops with this most basic of needs? I’m not sure, but at least one group is willing to rise to the call. Operation: Take One For The Country is an organization of fine women looking to send off our troops on a high note. (Insert your own joke about boosting morale here.) Just another example demonstrating that government programs just aren’t as intimate with the public’s needs as enterprising individuals.

Mad props to Ileana Cosaceanu for telling me about OTOFTC.

Monday, July 26, 2004

Inflation: The Economy's Miracle Grow

I love economics and I love being right. As a follow up to my article, “The Inflation of Spider-Man,” here are the actual top twenty-five grossing movies for the US market of all time. Lee’s Movie Info provided the nominal numbers and Steven Morgan Friedman supplied the inflation calculator. The number in parenthesis is the movie’s nominal ranking. The number in brackets is its box office revenue, (in millions) in 2003 dollars.

1. (56) [$2,480.99] Gone with the Wind
2. (62) [$2,265.64] Snow White
3. (2) [$1,423.86] Star Wars
4. (276) [$1,227.78] Bambi
5. (375) [$1,067.10] Pinocchio (1940)
6. (39) [$977.83] The Exorcist
7. (439) [$967.68] Fantasia
8. (27) [$926.94] Jaws
9. (103) [$899.83] Sound of Music
10. (123) [$860.07] 101 Dalmatians
11. (3) [$836.10] E. T.
12. (130) [$768.65] Jungle Book (1967)
13. (21) [$701.67] Empire Strikes Back
14. (1) [$673.90] Titanic
15. (102) [$670.74] The Sting
16. (235) [$633.57] Doctor Zhivago
17. (373) [$627.16] Cinderella
18. (280) [$587.69] Mary Poppins
19. (152) [$585.95] The Godfather
20. (363) [$579.00] Peter Pan (1953)
21. (268) [$565.76] The Graduate
22. (17) [$562.19] Return of the Jedi
23. (327) [$525.97] Lady and the Tramp
24. (70) [$537.71] Grease
25. (279) [$517.09] Butch Cassidy

California's Lost Rights

I just got back from the IHS seminar in Los Angeles and it’s good to be home (sort of). As most of my fellow libertarians groped their way home, I spent another day with an old friend of mine, Seth, who lives in Pasadena. He had some interesting insights.

Los Angeles has state laws against cutting and saving places in line. You know they’re state laws because in every theme park there are big signs citing the legislation. Seth downplayed the laws, saying that you usually just get warnings but the practiced enforcement isn’t the core issue; it’s the potential enforcement. If there’s a law against something as harmless as cutting in line, that’s a gateway for police to abuse your rights. What happens when the public demands that the police “start doing more” to enforce crime? Cutting in line is something pretty easy to catch and issuing more fines and less warnings are not only good for the state budget but for state politics.

But that’s not the worst case scenario. Bureaucrats, police and judges are always under pressure to be hard on drugs. It’s pretty easy to claim people who cut in line tend to be the rebel rousers that are more likely to shoot up. A cavity search may not be standard procedure for the line lawless now, but that very real potential exists.
 California doesn’t just set the foundation for interfering with people’s civil rights; it likes screwing with economic ones, too. According to California State law, if a movie theater is in danger of going out of business, it gains exclusive rights to show certain movies, movies the theater gets to pick. This artificial market entity’s purpose is to try to prevent theaters from failing and it certainly works. LA is lousy with movie theaters. Personally, I’d like to see another Starbucks.

Tuesday, July 13, 2004

Paths of Salt

Apologies to all three of our readers for the lack of voice in the past several days but I’ve been quite busy reading Salt: A World History, by Mark Kurlansky, among other slightly less interesting of activities.

I’m not kidding when I said that salt is interesting. Salt is one of the oldest commodities ever pursued, though it is one of the most abundant resources on the planet. Salt is needed to preserve food, create saltpeter, raise livestock, purify ore and make cheese. The Mormon Church drew much of its early revenue because it sold the salt its citizens extracted from the Great Salt Lake. Venice’s main source of prominence was its function as a trading center for salt. During the Civil War, saltworks was a main focus of attack a strategy that hamstrung the Confederates for the entire war. When the South surrendered, they requested provisions because Robert E. Lee’s soldiers hadn’t had anything to eat in two days.

There’s a hundred examples of salt-related path dependence in Salt but my favorite relates to the reason why I keep getting lost the moment I leave the interstate.

“Studying a road map of almost anywhere in North America, noting the whimsical nongeometric pattern of secondary roads, the local roads, the map reader could reasonably assume that the towns were places and interconnected haphazardly without any scheme or design. That is because the roads are simply widened footpaths and trails, and these trails were originally cut by animals looking for salt...The lick at the end of the road, because it had a salt supply, was a suitable place for a settlement.” –Mark Kurlansky, Salt: A World History, page 200

Just chew on that for a while.

PS: Mike and I will be in LA for the HIS seminar all next week and will return to blogging on the 25th or so.

Thursday, July 08, 2004

How Economics Invented the Modern Mine

Economics is everywhere. According to the History Channel, 90% of all gold discovered in the world was discovered after 1848. Considering that people have been looking for gold since civilization began, I asked why has so much of it been found within the last 150 years? And more importantly, can we learn something about entrepreneurship and innovation in the process?

When one hundred thousand prospectors stormed California in 1849, they quickly swallowed up all the surface gold in just two years. Thereafter, corporations, armed with new techniques and technologies as well as large sacks of cash, were able to get at gold no single person could get. Companies like Comstock mined at such a large scale, methods of squeezing out as much gold as possible from ore were profitable. Starting in the 1850s and never stopping, technology turned gold from an exotic wonder to an expensive commodity. Some of these technologies were hydraulic mining (using pressurized water to tear away soil), deep tunnel mining (using timbers to create the now-familiar “square” pattern that reinforces the mines), dynamite and a compressed air drill, saving the miners from back-breaking work. And while each of these new creations had their flaws and dangers, they were quickly replaced with safer, more effective technologies. For example, the compressed air drill was known as the widow-maker—because it spat back dust that often resulted in lung disease of the operator. The nickname became less accurate when a safer drill was introduced only a decade later.

In 1968, the federal government stopped regulating the price of gold ($35 an ounce), which skyrocketed shorter there after. In response to the deregulation, the technological surge was even more so, spawning new technologies in everything from computer programming to air-conditioning to non-verbal signals to new drills.

I pose this brief tangent into mining as just another example of the wonders of technology and free markets. Motivated by no one but themselves and prices, individual, autonomous people raised the living standard of everyone but not just adding new technologies that enhance our lives but by providing a valuable commodity that nations once started wars over. And for anyone that still considers corporations to be heartless entities living off the life blood of the worker and Mother Earth, consider this: as far back at the late 1800s—before OSHA, mind you—these big heartless corporations forced their workers to take breaks because the heat in the deep tunnels was so severe. How's that for the miracle of the free market?

Monday, July 05, 2004

Won't Someone Think of the Children?

Happy Independence Day everyone! And as much as I love this country, I was reminded today of the limits of my admiration for a country that claims to adore the miracle of the free market. During the local festivities my family attends, I ran into my old high school social studies teacher, Jeff, who now works at a local public school. After catching up a bit, I told him I’m interested in teaching, to which he reminded me of two huge problems with the public education system.

The first is the firing problem. Jeff pointed out that the public schools have bad teachers in them, preventing newbies like me positions to could fill. I have no idea how common they are but the real point is how hard they are to fire. Jeff referenced the old saying by Louisiana Governor Edwin Washington Edwards that they only way he’d lose a race (or in this case get fired) is if he was found in bed with either a dead girl or a live boy. (Though he later lost to Buddy Roemer in 1987.) I can think of two main reasons for this structural problem. The first is one that I hope Mike will provide more concrete evidence for as it is more of his area: teacher unions. From what he’s told me (and this doesn’t surprise me at all) is that the unions make it incredibly hard to fire teachers. The other obstacle is a supply problem. The fact of the matter is that there are few eligible teachers at the high school level, especially for disciplines including biology, economics, math, foreign languages, physics and so on. Schools don’t want to fire teachers if they don’t think they can replace them. (I wish I asked Jeff why he thought it was so hard to fire teachers and I hope that once I give him the address of LLL, he’ll lend support to one of these theories or provide a new insight best accessible to those with the local, tacit knowledge of a public school teacher.)

While the teacher shortage is a real problem and legitimate grounds for keeping less than good teachers, what defenders of our public school system tend to ignore is that they are an author of their own problem. The second obstacle I’d face is my lack of a teaching certificate. Because I decided to major in political science and economics, I didn’t have time to get a certificate, a perquisite to teach in any Iowa public school. I question that claim I need documentation to prove I can teach. I’ve tutored students at the college (with notable success), taught friends in my spare time (with their gratuitous thanks) and lead numerous undergraduate class discussions in the areas of my expertise. My mother teaches college-level math so I have an experienced resource to call upon if I ever run into a problem I don’t know how to solve. Next semester, I’ll be a TA to an undergraduate economics course, organizing study sessions and grading their tests and homework. And the bottom line is, I’m a personable person and have taught many people many different things with compliments all around, which is more than I can say for some teachers and professors I’d had in my educational career. Requiring a teaching certificate is not only insufficient insurance against poor teachers, it prevents good teachers without “proof” from having the opportunity to instruct.

The state of our public school system is the result of a vicious circle. Parents and other voters want to guarantee good teachers so they require a certificate, which puts a strain on available teachers. This shortage forces schools to keep the instructors that got the certificate despite being poor at their job, which only encourages more regulation. But if we were to remove the requirement (as Illinois schools are slowly doing), there would be potentially good teachers to replace the bad. Will it be enough? It’s hard to tell, but there will certainly be more than before, and, as the bad ones are rooted out, there will be better ones, too.

Friday, July 02, 2004

The Inflation of Spider-Man

Spider-Man 2 made box office records (at number 4), raking in $40.5 million dollars on Wednesday (of which I’m proud to say I was a part of). But the industry’s approach to ranking films is meaningless for the simple reason they ignore a big part of economics: inflation.

It is exciting to keep reporting record-breaking numbers, each reaching new and greater heights, which is probably why no one ever adjusts for inflation. Luckily for us, did some of that for us. According to “mainstream” numbers, the ranking for the top five highest grossing films at the box office (1977 and after) is as follows:

1 [$600,788,188] Titanic (1997)
2 [$460,998,007] Star Wars (1977)
3 [$431,197,000] ET (1982)
4 [$431,088,297] Star Wars: The Phantom Menace (1999)
5 [$403,706,375] Spider-Man (2002)

I’m happy to report that, after we adjust for inflation, a story about a kid dying at sea no longer reigns supreme:

1 [$981,848,794] Star Wars (1977)
2 [$806,467,408] ET (1982)
3 [$774,918,846] Titanic (1997)
4 [$573,323,886] The Empire Strikes Back (1980)
5 [$560,754,164] The Return of the Jedi (1983)

And that’s not even adjusting for population growth. If the goal is to measure a film’s success by the number of tickets sold, shouldn’t we include the change in the number of people to buy tickets? The world population estimate (the numbers above are international box office) grew by 33.65% from 1977 to 2004. Obviously, using this number isn’t very useful (Zimbabweans are less likely to see the newest release than Canadians) but it does indicate that it’s not a simple matter of inflation and it certainly isn’t a matter of nominal dollars.