Market Power

Is it tea party or Tea Party?

Is it Tea Party or tea party?  My take (subject to revision, of course):  the tea party is still a loose organization of mostly local groups concerned with limited government (or lack thereof) and not a coherent group like the Dems or the Republicans. If the groups ever coalesce and formally organize, then they can go to the big boy letters.

Assorted Links

1.  How hotel price gouging promotes efficiency and safety.

2.  Medical queues to get longer.  Health care will *always* be rationed.  The questions are "how" and "by whom?"  Oh, and what constitutes "health care?"

3.  Michael McCann on the legality of the BCS.

4.  Students aren't always truthful in filling out teacher evaluations (Via Craig Depken).  You don't say?

"How Economics Saved Christmas"

Art Carden of Division of Labour has written a wonderful adaptation of the Dr. Seuss classic "How the Grinch Stole Christma"s story entitled "How Economics Saved Christmas."  Is this Pigovian/Coasian story the antidote to Waldfogel's The Deadweight Loss of Christmas? Via Cafe Hayek.

Top 10 Homebrew Recipes

Here is a top 10 list of homebrew recipes at Popular Mechanics.  I've got three batches to brew up over the holiday break, and I miss it when my house smells like a brewery.  Via Instapundit.

I have completed your homework. Please travel to the nearest airport and fly to Charlotte, NC. Call the "Hickory Hop" and ask to be transported to Boone. When you arrive, send me an email and I'll let you know where to leave the $1,000,000. ...

... When the cash has been deposited in my bank account, I'll email you the homework file.

From the inbox:

I study Development Economics in one university in [country], with many subjects in the university, Environmental Economics is one of my difficult subject. I have many problem that I can not solve by myself, so I need your help.
 
I find it very difficult to find solution and I completely don't know how to fill the table of the abatement emission of a firm. Could you feel free to do this for me and explain me how to do that. Please find this exercise in my attach file.

My reply:

Sorry, I can't do your homework for you.

via www.env-econ.net

That's Professor Whitehead at Environmental Economics.  A professor is probably the worst person to contact to do your work for you.  We're kind of anal about plagiarism, you know.  The person obviously doesn't know there is a market for what he/she is looking for.

Tim Pawlenty on Public Unions

Minnesota Governor Tim Pawlenty has an op-ed in today's Wall Street Journal about how to reform public union labor relations.  He gives three "overriding principles."

1. Get public pay back in line with private pay (all else equal, I hope)

2.  Have government use the same accounting principles as private businesses.

3.  End defined-benefit retirement programs.

Here's his op-ed.

But none of these hits at what I take to be his number one cause for the public union problem (full disclosure:  I am a public union member.  But I'm no union activist.).

How did this happen? Very quietly. The rise of government unions has been like a silent coup, an inside job engineered by self-interested politicians and fueled by campaign contributions.

Public employee unions contribute mightily to the campaigns of liberal politicians ($91 million in the midterm elections alone) who vote to increase government pay and workers. As more government employees join the unions and pay dues, the union bosses pour ever more money and energy into liberal campaigns. The result is that certain states are now approaching default. Decades of overpromising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion.

I agree this is a big problem.  It is against the law for employers to make contributions to employee unions for obvious conflict-of-interest reasons.  But it doesn't work the other way around when it comes to pubic unions.  Of course, by donating to the people who they hope will become their employer, this gives unions undue power to influence government policy for their own benefit, even at the detriment of taxpayers in general.  If Mr. Pawlenty is serious about reform, he should start with reforming public union campaign contributions.

Ethanol's Three Headed Monster

It looks like Congress is keeping the three-headed monster, which I dub Cornzilla, alive cuz we know that ethanol is simply a wiz-bang product that's going to be hugely profitable.  This is why it needs government to 1. subsidize it, 2. protect it from foreign competition, and 3. force people to buy it.

Private investors?  We don't need no stinkin' private investors!  Who needs private investors when we've got politicians willing to keep Cornzilla alive?

Video of the Metrodome Roof Collapse

 

Via the Minneapolis Star-Tribune.

Whatever Happened to the Ballpark Village in St. Louis?

An aquarium, a 20-story residential tower, a massive underground parking garage built in the hole left by the old Busch Stadium. Nearly a half-million square feet of top-notch office space. Streets lined with stores and restaurants unique to the region. A development that could exceed $600 million, creating hundreds of new jobs and the jolt sorely needed to revitalize downtown.

A 24-hour place to live, work and play.

Story by Doug Moore in the St. Louis Post-Dispatch here.  Sports stadiums are frequently pitched as boons of economic development, a sort of "if you build one, it will come" promise.  So what happened?

However, when it came time to bring baseball's best together in St. Louis, all the Cardinals could offer was a softball field and a parking lot to greet fans.

Nothing happened.  But guess what?

But to the surprise of city leaders, the developers were back at the table before a city board earlier this month, saying financing is in place and tenants are ready to move in.

All we need, they said, is the money from the taxes to make the project come together.

If the village is going to be that great of a place, it doesn't need subsidies to get off the ground.  The developers should have no trouble making a pitch to private investors. 

Here in Minnestoa, the Metrodome in Minneapolis has collapsed due to the weight of the snow from yesterday's Snowmageddon.  I'm sure we'll hear the same pitch about how the city needs a new stadium not for the obvious reason but because of the economic development.  That was one of the selling points of the Cards' stadium and it hasn't panned out.

 

The Shut Down Condition, Snowmageddon Style

The southern half on Minnesota is in the throes of a major winter storm.  As of midmorning, the storm dumped almost a foot of snow in some spots around the Twin Cities metro area.  Mankato, where I live, has only had 3 - 4 inches of snow so far, but that came on top of a fairly thick coating of ice.  As the low pressure system intensifies and passes to our south, winds will pick up to between 20-30 mph and the temperatures are forecasted to drop to below zero overnight.  That has driven many private businesses to shut down for the day.

Students of economics learn about the shut down condition which says that if a firm's short run revenue expectations don't cover the variable costs of production, the firm should close its doors.  With blizzards, not only do revenue expectations fall, but the variable costs of production increase.  For example, it becomes more dangerous for people to get to and from work.  Not surprisingly, many local businesses have closed their doors for the day.

Economic models may look esoteric to some, and others may think that their assumptions make them virtually useless.  That's true in some cases, but the models are meant to capture the essence of rational, self-interested human behavior.  That's the case with the model of the shut down condition.  Here is another post dealing with the shut down condition.  Here is another one.  Here is one more.