Tuesday, February 28, 2006


We talked previously and in emails about having another debate. What about global warming. I think this reading can start us off on the right track.

Talk amongst yourselves....

Wednesday, February 22, 2006

The Reading Group

First of all, if you aren't coming to the reading group, you're missing some good stuff. I always have a lot of fun at those meetings.

And if you haven't heard, we're going to have them on Tuesday at 4:30pm instead of Wednesday from here on out. There were too many conflicts with the heavily subsidized Economics Society.

We're finishing up "The Law" (and likely goofing off) at the next meeting. See you there.

Saturday, February 18, 2006

Public Choice

The bootleggers and baptists are up to their old games again. This time some other baptists are the whistle blowers.
World magazine (www.worldmag.com) is an evangelical weekly magazine, published in Asheville. They have brought to the evangelical community's awareness an interesting story.
Jack Abramoff, of the Indian Casino scandals, gave Ralph Reed, former Christian Coalition president and Religious Right poster boy, nearly a million dollars to influence pastors and their congregations into voting against a law that would legalize gambling in Texas. Abramoff's goal was to protect his clients' monopoly. Reed's motive was to prevent gambling... uh... and to get paid.
The interesting part that World brought out was that Reed asked Abramoff for more money and said that he could get Focus on the Family's James Dobson to speak out against the gambling law on his popular and influential radio show.
This caused something of a rift between World and Focus. A Focus VP got upset that Focus was implicated by World in the scandal and wrote a letter to the editor that World refused to publish, and then he read it on the air.
Focus' Dobson, and World's Editor, Marvin Olasky, have both managed to keep a cool head about the matter, both of them backing their own employees, but at the same time identifying the real source of the problem: Ralph Reed.
I hope that someday Christians will realize that legislating morality does not affect societal norms, but merely supports bootleggers. In other words, I hope that they will learn some economics. And I hope that economists will learn some ethics. And I hope that the law can be decontaminated.
Read more about this at:(http://www.worldmag.com/articles/11489) original article in World.
and (http://www.worldmag.com/webextra/11574) World's explaination of the behind the scenes stuff between World and Focus, along with a list of checks received by Reed from Abramoff.

Friday, February 17, 2006

Publicity crisis

As a favor to me, would all of you who read this blog be sure to show up to the event on Monday and even bring a friend or two? Flyers didn't get up until this afternoon and mass emails to economics and political science majors didn't get out much sooner (all my fault).

I appreciate anything you can do to increase our attendance and make Dr. Lee feel well-received by SPEL and NC State. Thanks for your help.

Not Yours To Give

Here's a link to Davey Crockett's Speech about the government's involvement in charity. It's an easy read and tells a good story. The fact that the speech had the desired results makes it more important. This speech should be read aloud in Congress everyday in place of whatever prayers are offered publicly.

Wednesday, February 15, 2006

What classes should SPEL members take?

I suggest "Law and Economics" (ECG 512) with Professor Knoeber if you have the EC 301 pre-requisite, and Professor Cordato's "Political Economy of the Market Process" (soon to be EC 377) if you have the EC 201 or 205 pre-requisite. Both of those courses fit very well with what the club is all about.

I'll leave it open for Political Science majors to tell us what PS courses might be good for SPEL members.

And, to the people with other majors, feel free to include courses other than just EC and PS.

The Economy

So why does everybody keep saying that the American economy is so bad?
Look Here.


When is it 'okay' to use violence? Is there such a thing as a "Just War"?

Tuesday, February 14, 2006

Getting over the hump

This post is intended to stir up some action from the blog's inactive members.

There are 16 people registered as members of this blog, and only six different people have posted on the main page. I don't care what you write--just write something. I promise it gets easier after that first post.

Plus, I'm not as worried about how "on topic" each post is (politics, economics, law) as I am about whether or not anyone is posting. So let people know what you've been thinking about or ask a question or something.

Just to prove that you can put just about anything you want on the blog, here's one of my favorite pictures. I took it one morning freshman year after staying up all night (it was a good idea at the time). You might recognize the statue since it's on campus, just up the hill from the library. I thought the hat was a nice touch.

Monday, February 13, 2006

Next General Meeting 2/20/06

Our next speaker is Professor Dwight Lee on February 20th at 4:30pm in Winston 29.

Dr. Lee will discuss the economics and politics of Social Security with us while we likely eat Oreos. How can you say "no" to this face? Hmm?

We hope this meeting time works out better since even some executive board members had to miss the last meeting (Monday at 7pm) due to time conflicts. I'm open to suggestions about future meeting times.

In the meantime, keep posting.

Sunday, February 12, 2006


First knowledge determines the way we understand everything. This is difficult because we sometimes have to try to understand someone with different first premises than our own. Semantical collisions become legion.
Right now I am trying to understand Keynes. Well, at least McElroy's reading of Keynes.
A few questions for anyone out there who might have insight. Please help me.

What is "a limiting point of the possible positions of equilibrium."? This is McElroys quote of Keynes contention with Classical economics.
Is he talking about looking at the long term?
How much did Keynes assume a civil law framework with government deliberately shifting interest rates and money supplies (inflation)? Is this what led him to these conclusions?
In other words, is the special case in which Classical Economics works, according to Keynes, the case where government is restrained to its proper role? All other cases, where government encroaches upon its citizens, being the case which we are actually in, and ought to remain?

Thursday, February 09, 2006

Medical Care

I'm getting my vertically impacted wisdom teeth out tomorrow morning. Hopefully it won't hurt too bad since I'm not very wise to begin with.

But while I was at the consultation appointment today, I started thinking about the economics of medical care. It's a heavily regulated industry, presumably because there is a huge information asymmetry problem, i.e., the doctors know better than I do what needs to be done and where else I can go for it. But is that presumption true?

I'd agree with it in a static, one-shot world--a world where my oral surgeon had just one day to make as much money as possible. He would lie to me and take me for all I have. "You definitely need this ridiculously expensive (albeit quick) procedure or you'll die tomorrow. In fact, you'll die before you have time to get a second opinion. "

But in a dynamic world where people communicate with each other and learn over time (the one we live in), this kind of thing is very hard to do for more than a little while. There'd be no reason to. Since doctors can learn from each other's mistakes, they realize that it's bad for business to gouge patients. Patients talk to each other or have friends or neighbors who are doctors. Bad doctors get bad reputations and good doctors get good reputations. In fact, I chose my oral surgeon based on his solid reputation.

Doctors spend too much time in school to ruin their practice for a few short-run scams.

Wednesday, February 08, 2006

Eminent Domain Revisited

I just can't get enough eminent domain. Last week in my Law & Economics class I heard an interesting "take" on eminent domain takings; essentially:

If a non-government entity takes your property, it is settled with an injuction or property rule (it's criminal and you'll likely get arrested). But if the government takes your property, it is settled by compensating you for damages, i.e., with a liability rule. They pay you "just compensation" for your loss of property, but they have NOT committed a crime.

This has interesting (read: profoundly inconsistent) implications as some have recognized:

"I honestly don't see why I only get constitutional protection in the form of a property [rule] from a search of my home but not the tearing down of my home for the benefit of a private developer (as Justice Thomas observed in his dissent)"

This is not the country I signed up for. I want a new one.

P.S. I realize I've skimmed over some of the details like the process required for govt to take private property. I feel OK about this since the whole process seems arbitrary to me and since it hasn't proven to be a huge obstacle for determined local governments.

New Wal-Mart epidemic out of control

Fellow citizens,

I write to warn you of a devastating epidemic which is sweeping the nation with unprecedented force: Wal-Mart-itis. This deadly inflammation of savings on consumer goods has already overwhelmed more than 3,000 towns across the country. This is what it has done in the last 40 hours (or years?):

(Click on the image to enlarge.)

Expect the worst. Experts say the next 40 hours (or years?) could usher in a new era of nearly constant savings. WalMartWatch has been predicting just this sort of disaster since last year--if only we had listened!

Tuesday, February 07, 2006

Keynes Detox

Anybody know a way to deal with a heavy Keynsian hangover? I've got
y=u(z+g-ct)-u(i+x)r doing laps around my head like those birdies in the cartoons. None of it makes any sense! Well, I guess it does... but it presupposes that the government will get involved (because it was, but it shouldn't have been) and maybe that's why it did even more. It's difficult to learn something that runs contrary to your nature.

What is Common and Why Don't We Pay More Attention?

SPEL is a student organization for those interested in the intersection of politics, economics and law. These disciplines share a great deal. The methodology of social science comes to mind. So too many common areas of interest such as the political process, the relationship of government to various markets, etc. etc. But what is most basic about what they share?

It seems to me to be an interest in the study of how institutions emerge, evolve and interact.

It seems so basic precisely because we rarely hear a political science or public administrator talk about government in terms of fundamental institutitions. Typically it is a process -- such as lawmaking, regulatory or electoral -- or it is a policy/program outcome that captures the interest of politically oriented folks. There is a similar effect among economists and those who utilize the economic way of thinking. We engage in marginal analysis, cost benefit discussions and have ideas on a whole wide range of policy or program outcomes. Rare, although not totally unheard of, are the economists who focus on institutions such as the rules for trading in a specific market, how actors in the banking, finance and credit markets do their work, or the economics of government agencies as they engage in the political process (i.e. public choice and other investigations of bureaucracy.) (NIE also comes to mind for those Chicago fans out there.) And the lawyers and law professors? Perhaps more likely to focus on institutions -- like common law or the rules of procedure -- but in my experience, it is almost always as a means to an end. The end is nearly always case law, precedent and a more elegant (stronger) legal argument. Rarely are institutions interesting -- to students and teachers of the law -- in their own right.

Why is this? Law is itself a complex institution. Economics is the study of human action and purposeful interaction -- and we relate to one another through institutions as different as family, workplace, place of worship, neighborhood, government. Similarly, the study of government is the study of formal institutions such as departments, agencies, boards and commissions.

What is an institution? It is a meaningful or significant practice, relationship or organization in society. Perhaps there is more focus on the most significant political, governmental, economic and legal organizations and practices than I'm willing to admit. But I think not. I think it is much easier to ignore institutions -- just as we tend to ignore the walls of the room in which we sit because they are always there and are difficult to change -- than it is to understand and shape them.

Friday, February 03, 2006

A Pro-Tariff Bastiat?

I sincerely hope that quotations like the one below do not tarnish the reputation of our beloved Frederic Bastiat. Notice the law he wished for gave no favors to specific industries, although he curiously made the distinction between necessary goods and luxuries.

I have read other essays in which Bastiat approved of tariffs to fund minimal government services. According to Dr. C, many classical liberals advocated tariffs as the main source of government revenue.

Even in that case his main enemy was still protectionism, that is, tariffs or quotas designed to protect certain domestic industries (at the expense of domestic consumers). Here's that passage I was worried about, from his introduction to "Economic Sophisms":

"But," people may insist, "it is not enough to tear down; you must offer something constructive." I, for my part, think that to tear down an error is to build up the truth that stands opposed to it.

Beyond that, I have no reluctance to state what my wishes are. I should like to have public opinion persuaded to approve a tariff law framed in something like these terms:
The following ad valorem rates shall be imposed:
Goods of prime necessity . . . . . . . . . . . . . . 5%
Goods of secondary necessity . . . . . . . . . . . . . . 10%
Luxury goods . . . . . . . . . . . . . . 15% or 20%

Philanthropy II

The economics of charity are an interesting topic, but I'd like something more empirical for the time being. Do YOU give to charity? Do you give regularly? Do you have a plan as to how much you will give and to whom? What do you think happens to money you give to charity? What motivates your giving? Is it guilt, or pleasure?

Thursday, February 02, 2006

The Wage Slave

Are Anti-Strike laws slave labor?

Wednesday, February 01, 2006

Eminent Domain

The state legislature's "House Select Committee on Eminent Domain Powers" here in North Carolina is currently debating whether or not to pass an amendment to the state constitution (mainly) to protect against Kelo-type takings, that is, private-to-private transfers for economic development purposes. I was at the meeting today at 10am in the Legislative Office Building and I enjoyed hearing what everyone had to say.

It's my opinion that we should be very careful giving the state any eminent domain powers. Defined broadly enough, they could be used to take our property (whether we want to sell it or not) on a whim.

Meanwhile, courts have come to define "just compensation," which is what you get in return for your property after it's been taken, as the "fair market price," or what a similar property sells for under similar physical circumstances. This is unacceptable as a measure of value.

Imagine a family estate that has infinitely high sentimental value to you, but has only a $50,000 value in terms of the "fair market price." Eminent domain allows the state to take your property (priceless to you) and leave you with only $50,000.

It's no surprise if this sounds like a bad thing in general, since the market price for anything is approximately (just above) what it's worth in its second-highest valued use. We can only observe and quantify the second-highest value (not the highest), since the buyer only had to outbid the second-highest bidder. As a consequence, the market price is necessarily an underestimate of the value of property to the user.

Samuel Alito

Alito's in the Supreme Court by a margin 0f 58-42. Justice Alito is also something of a prophet:

"Sam intends to go to law school and eventually to warm a seat on the Supreme Court."

That was apparently in his 1972 yearbook at Yale. The man knew what he was talking about. Anyone care to cheer him on or criticize him? I'd like to see SPEL do a little of both.