Another video you should watch

PBS program NOVA had an interesting program this week called "Mind Over Money". It compared the belief of the free market economists like those at the University of Chicago who believe in the "Rational Theory" of Economics, versus the work of "behavioral economists", who study why individuals don't behave rationally. The show opens with an auction of a $20 bill that sells for $28....and the auctioneer wasn't even a decent auctioneer! This fascinating show is well worth your time, and it is amazing that the Chicago guys stick to their guns, despite the fact that it is clear to anyone who lives in the real world that they are dead wrong. And people wonder why Macro Economists are always wrong!

Watch this video HERE (sorry, it won't embed).

Oh, and thanks to Kip for making me aware of this!

Watch This Movie

As an economics teacher, I feel it is part of my job to scare the crap out of my young students. Particularly, I want them to understand that they need to pay attention, hold politicians accountable, and vote. So, I show them the film below, I.O.U.S.A. The version here is the 30 minute version, but it does a great job of showing the financial abyss we are headed for if we don't get our heads out of our asses. It is a non-partisan and informed look at the problem.......just the opposite of the Tea Party gang, who are outraged about deficits, yet mostly ignorant about what is causing them and what needs to be done. Gather your friends and family and watch it! But go to the liquor store first. You will want to drink heavily after you watch it.

In relation to that, the Economix blog at the NYT reports that the Peter G. Peterson Foundation, who made the film below, polled a bunch of former government officials of both parties who are not running for anything and therefore able to answer truthfully. 68% said that the solution required both cuts in government programs AND higher taxes. Have you heard a politician running for anything say that? Of course not, and there's the problem. They tell us what we want to hear, and we are too stupid to want to hear the truth.

Arizona's Immigration Law and Spring Training

You are probably aware of the new Arizona immigration law, which would seem to be a plan to encourage police to hassle anyone who appears to be Latino. Perhaps some day they will wake up to the fact that people coming here from Mexico to work does not bring violence. But our war on drugs, and the cartels it created along the Mexican border which now spreads north has.

My prediction is that the silliness of this law will hit the fan next year during baseball's Spring Training. All levels of baseball are currently stocked with a great many Latino players, many of whom will converge next Spring in Arizona. How long will it take for some young Dominican player, who speaks little english and left his room without his green card, to be arrested by some over zealous Arizona cop? My guess is not long. And this will lead to outrage among ballplayers, and pressure on MLB to do something about it.

The clubs who train in Arizona have invested money in being there, and are probably not likely to abandon the state quickly. But they are not going to like their latino players being hassled, and they are going to like it even less if it is a star player who ends up arrested. Stay tuned for the fireworks.

A few things on my mind.

The other day I attended a talk sponsored by Students for a Sensible Drug Policy (most of whom were still baked from celebrating 4/20) given by a former judge named Leonard Frieling from an organization called LEAP...Law Enforcement Against Prohibition. He was speaking mostly to the choir on the stupidity of our failed War on Drugs. Not much new to report really, except that there is an organization full of judges, cops and other former officials who recognize the waste and stupidity of a policy that has cost us billions without any positive results. You can visit their web site HERE.

I had to check to make sure I was reading the Denver Post and not The Onion this morning when I read this headline: "SEC staffers spent hours viewing porn at work". I then heard discussion of it on CNBC, with the idea that Republicans were going to use this as political fodder. Strange, these were people very high up in the SEC who should have been supervised by the appointees...and may even have been appointees...of our previous idiot President. The GOP will, I guess, say this an example of government waste. I would say it is an example of the actions of an administration that had no interest in doing the job the people elected it to do.

Finally, The NY Times has a long story today about how mining companies that are not run by evil bastards operate mines. Donald Blankenship, the CEO of Massey Energy, the owner of the mine that killed 24 people recently, can only be described as a complete scumbag. He obviously care about nothing but his own profits. Other than operating unsafe mines and stonewalling regulators, he has also dumped waste from blowing the tops off mountains in streams, polluting the water supply of surrounding communities, and bought the election of judges to make sure he could continue with his evil practices. We can only hope the government's investigation into the disaster in West Virginia will result in his indictment for murder, and this evil bastard goes to jail, where the other prisoners can do to him what he has been doing to the country for so many years.

Columbine, Terrorism, and risk management

Yesterday was the 11th anniversary of the massacre at Columbine High School, about 30 miles south of here. On that day, I was headed to the Rockies game with the kid that I mentored, and another "partnership" from the same organization. We had heard of the incident on the news, but were surprised when we got to Coors Field and no one was there. We hadn't heard that they canceled the game because of the massacre.

After 9/11, America was panicked and willing to take drastic, even unconstitutional and immoral steps to make sure that it would never happen again. Yet, even if there had been no changes, your odds of getting killed by a terrorist are tiny compared to your odds of getting killed by another American with a gun. Yet, after Columbine hardly any changes have been enacted to insure that a similar incident does not occur. And similar incidents have occurred, just about every year.

Had we reacted to Columbine, or the Virginia Tech killings, or any of the other similar mass shootings, like we did 9/11, we would have banned guns, or at least seriously clamped down on the rights of individuals to buy guns. After all, the Constitution was just a document for pussies when it came to getting tough on terrorism, so why should the Second Amendment of it stop us from making sure our kids don't get killed at school. Instead, since Columbine, few things have been done to even close the ridiculous "gun show loophole", that allowed the Columbine killers to buy guns without a background check. (It has been closed here in CO, and there is a bill in Congress to do it nationally that you can be sure the scumbags at the NRA will not allow to pass).

I am not, by the way, advocating that we ban gun ownership. I am, though, attempting to point out how irrational our actions are when compared with each other. We react extremely to the small chance of death from terrorism, yet casually to the much higher threat of death from a fellow citizen with a gun. Our fears overtake out logic, and it happens again and again, on issue after issue. Parents don't let their kids play outside, for fear of the almost non-existent odds that they will be abducted. So, the kids stay inside where they get addicted to video games, get fat from lack of exercise, and fail to build immunities to the things nature. Your child goes through life fat, dumb and sneezing, but at least you didn't expose him to the 1 in 10 million chance of abduction!

Yes, it is a highly irrational world we live in, and you can be sure your politician will play on your irrational fears to get your vote. One can only hope brains are still evolving!

Why does health care cost so much

I stole the chart on this post from the Economix blog at the NY Times, who stole it from a Harvard prof. This is something that has driven me crazy for years. I am a person who pays for his own medical insurance, and therefore has a high deductible policy. Whenever I go to the doctor, they send the bill to my insurance company, who then sends it back to them telling them I have to pay. Then I get a letter from the insurance company denying coverage, and another telling me how they price was reduced, then I get one from the medical center telling me the same thing before I finally get a bill. All of this nonsense just cost me a lot of money, and did nothing to make me healthier.

Now, think about when you go to the doctor. As you are escorted to where the actual health care workers will see you, how many people do you walk past? Those people aren't healing anyone. They are just there to make sure your doctor gets paid. Freaking CRAZY!!!

Unfortunately, the new health care bill does nothing to attack this problem.

Does this make too much sense for America?

Sunday I posted a link to Krugman's article on the economics of climate change. Today, in the NY Times Science section, THIS STORY appears about new, clean incinerators being used in Europe to turn garbage into energy in a way that emits fewer greenhouse gasses than landfills, and produces energy at a very low cost. Of course, we don't have any here in the US. I guess it makes too much sense.

The article states that instead of using this technology, NY city ships some of its garbage to Virginia via train, at a very high cost. But no, we wouldn't want to borrow a good idea from Europe....they're not Americans!

Krugman on Climate Change Economics

Great, but long, article from the NY Times Magazine about the economics of dealing with climate change by Nobel winning economist Paul Krugman. It includes a very nice primer on negative externalities, and the idea of putting a price on behavior that negatively effects others. I will be teaching my Micro classes about externalities in a few weeks, and plan to make them read this story, but you can read it now RIGHT HERE.

Why Tribute Bands Suck

The Dark Star Orchestra was at the Boulder Theater over the weekend, giving a bunch of young neo-hippies with ridiculous white-guy dreadlocks the chance to pretend they are at a Grateful Dead concert. My question is, even assuming everyone there was on drugs (a pretty good assumption) it still seems like a crazy idea to pay to see a band play songs exactly as another band used to play them. That's not art, it's theft!

The whole "Tribute Band" idea is a complete scam, that allows musicians without enough imagination to create their own music to make a living doing someone else's. If you had real talent, you'd make your own music.

Somehow, people get away with this lame mimicry in the music business. Can you imagine some other art form where people legally make a good living doing other's material? Name a re-make of a classic film that got any respect....and if it did, the director put a new twist on the film. Even better, think of my hobby of comedy. Rodney Dangerfield was hilarious, but is now unfortunately no longer with us. Can you imagine if I put on a white shirt, skinny tie, got some nervous ticks and started saying "I don't get no respect", calling myself a "Rodney Tribute Comic"? Even if I mimicked Rodney perfectly, would that get me booked in clubs around the country? I think not....in fact, I hope not.

Yet tribute bands have national followings, and I'm sure there isn't a city in the country without at least one group of 4 guys, one of whom plays bass left-handed, who are trying to be the Beatles. And here is the absolute dumbest thing: They sell CD's! That's right, people pay good money to buy a CD of a bunch of hacks trying to copy the work of great artists, when they could buy the CD of the real band instead.

I guess P.T. Barnum was right!

Dumbing Down and scoring!

A couple of thoughts on my mind today.

Stephen Colbert had a bit last night about a new version of Scrabble which will allow proper names. Surprisingly, it will not be called "Scrabble for Idiots, Morons, and People who Drool on Themselves". Players of real Scrabble are outraged, as they should be, as this is another sign of the dumbing-down of modern life. I hope the new game has an electronic way to add up the score for the dolts who will play it, since they will likely be unable to add up the score themselves. I imagine my sister will bring this new game to Mom's next Xmas in an effort to finally beat me at Scrabble. Last year she brought "Super-Scrabble", which turned into a financial disaster for her.

If you are interested in brilliance instead of dumbness, then it is time to acquaint yourself with the amazing Lionel Messi. With the world cup coming up this summer, you will find yourself forced to pay some attention to soccer, which means you should know who the world's best player is. There is no doubt it is the deceptive little Argentinian, who plays his club football for Barcelona, and if you weren't an American you would already know him. Yesterday he put up 4 goals against Arsenal, making one of the world's better clubs look like a bunch of amateurs. If you see that Barca or Argentina are on TV, you've got to see Messi tieing defenders in knots. And, for those of us who have to lie about being tall, the fact that he is only 5 foot 5 makes it even better.

Speaking of scoring, Tiger Woods will tee off tomorrow for the first time since we all found out that he was playing more than 18 holes every day. While clearly Tiger has been naughty, lets remember that he is just a golfer. Tiger never claimed to be a bastion of morals, marital fidelity, or anything other than outstanding golf. It's not like he's a politician who ran on moral values, or a religious leader caught with a harem of young boys. He's just an athlete. His transgressions were against his family. Maybe we think less of him, but at this point we would have to be fools to think that athletes are anything but flawed people, just like the rest of us. As far as we know, he hasn't cheated at golf......unless, the suddenly spoken rumors about Tiger and performance enhancing drugs turn out to be true. I actually began to wonder about this about 2 years ago, when I realized how big his upper body has gotten. Nobody ever mentioned his Barry Bonds-like muscle gain until he got caught cheating on his wife. Now, the media have stopped fawning and seem willing to ask that question. Interesting!

Happy Dyngus Day!!!

Happy what now? If you aren't from Buffalo you probably have no idea what I'm talking about.

Dyngus Day is the inverse of Mardi Gras. As the President of the Chopin Singing Society in Buffalo once explained to me "Mardi Gras is the last blast before the fast. Dyngus Day is the first blast after the fast". In other words, lent is over and we don't have to behave anymore. When I lived in Buffalo, it was a good excuse to drink!

Anyway, there is baseball today, the Yankees have already lost a game, and the sun is shining here, so its a Happy Dyngus Day.

New links!

Happy Easter. I personally find the existence of the Easter bunny as likely as the story this holiday is based on, but enjoy your ham.

I just wanted to point out a few links I have added to the friends list in the past few weeks.

I already had a link to Claire Walter's Culinary CO site, but she also has a another useful blog now called Mile High On The Cheap. Lots of good deals, especially if you have kids. Go visit and sign up for the daily email.

Mike Vasicek, who you can see nearly getting punched out by me in the murder mystery video below, also has what he calls a "two piece latin jazz orchestra" called Blue Mundo.

My friend Zo has a business arranging "humanitourism" trips...trips that combine good works with adventure travel.

Finally, I added a site to a tall thin auctioneer who will be happy to help your organization raise funds.

Check out all the links.

Now, is there anyone who won't be rooting for Butler tomorrow night?

The wrong way to a good end.

Earlier this week, I was listening to last weeks's "This American Life", a story about a joint project between Toyota and GM called NUMMI that was established in California in 1984 to allow both companies to learn from each other. Toyota wanted to learn about how to deal with American workers, and GM wanted to learn how to build cars better and cheaper. Toyota got what they wanted, but GM managed through arrogance, short-sightedness, stupidity, and inertia, to learn nothing. It is a great story, and you can listen to it HERE.

About the time I was listening, President Obama was announcing higher fleet-wide MPG requirements for auto manufacturers. I have always thought that this is is an ass-backwards way to achieve a good goal, that of reducing our use of petroleum products in this country. It struck me that one of the problems with using fleet-wide MPG ratings is that it causes manufacturers to do things they are not good at. In relation to the NUMMI story above, one of the things GM might have gained from Toyota is to learn how to make small cars. They didn't. In fact, all the US car makers are bad at it, and don't make any money on producing small cars, because the people who buy small cars don't trust them.

GM is good at making big cars, SUV's and trucks. They have never liked small cars, never made a good one, and don't sell any. It would make business sense for them to drop this part of their business and specialize in their strength......hell, that's what they taught us in B-school, and I went to Michigan where the auto industry is just down the road. But they can't do that, because they need to sell some small cars in order to meet the fleet requirements. We don't make Dell make mainframe computers, or make ESPN cover the opera, so why make GM make small cars. No one wants to buy them!

What should we do instead? Easy. Tax the hell out of gasoline, like they do in Europe and Japan. That would move us automatically to more fuel-efficient cars, and force manufacturers to compete on that basis. Simple, easy to understand, easy to enforce.

Of course, this kind of sane policy will never happen, because no politician has the guts to vote for a tax on something everyone needs. So instead, we get a backward tax, as the price of cars goes up to achieve the same goals, and we have a convoluted formula that is difficult to understand. And this way, it looks like those evil car companies are being forced to improve their cars to help out us hard working consumers.

Well, as they say in advertising, perception is reality!