Think Economically


Maximum understanding, minimum average total cost.

News and analysis: Tampa has more than its share of poverty; Space elevator group LiftPort is back in business; Apple v. Samsung, ugh.

Republican political types are gathering in Tampa, Florida for the Republican Convention, and most people are talking about either the election, or about Hurricane Isaac. Not so many are talking about Florida’s still-depressed housing and job markets, or about the 25% poverty rate.

Part of being a society is deciding how we solve the economic problem–the problem of scarcity, and a big part of that is who gets what.

I don’t claim any particular insight into how we ought to do this: some people focus on fairness of process, and some people focus on fairness of outcome. In a broad sense, people seem to think both are important. Maybe a process is acceptable until it produces an outcome that is not, or outcomes are acceptable until it becomes clear how unfair the process is. Societies have to decide how to distribute goods; the consequences are ultimately borne by the societies as well.

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Video – Introduction to Statistics part 2 – Data

Today we talk about data–what we mean, where we find it, why you might want to get your hands on some, as well as data scales and cross-sectional v. time-series v. longitudinal. Enjoy!

Today’s video – Intro to Statistics part 2 – Data.

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News and analysis: Foxconn raises wages but keeps long hours, Nike sells $315 shoes, Herr’s makes 5-6 tons of chips/day

So FoxConn workers are making more than they used to. They’re still working 60-hour weeks in violation of government labor laws.

So the wages are going up, changing relative wages against both the U.S. and against other developing nations. What’s going to happen? Well, we should expect that some manufacturing jobs will move back to the U.S. We should also expect higher value items and higher value brands to be established as more important parts of China’s economy.

The downside: prices on consumer goods–which have been depressed for a long time due to the 2000s explosion of labor due to the expansion of western firms into China–are likely to rise.

The upside: China will start buying more stuff, particularly higher-value items, in which the U.S. has a comparative advantage, so U.S. wages–which have been depressed for a long time due to the same explosion–are also likely to rise.
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Principles of Microeconomics – news video feed and some commentary

So the Fall semester has begun. I show YouTube clips in my class and discuss them. If you’re interested in following along, the playlist is here and will expand as the semester goes:

In the first class, I talked about texting campaign contributions, Rio drug gangs banning crack, and football players going on diets.

First, texting campaign contributions. The goal here, presumably, is to drive down the transaction cost of contributing–or at least the psychic transaction cost borne by the contributor.

A few things worth noting: this is probably aiming at people for whom texting is a regular activity–so read: younger.

Second, the contributions are for $10, which is not very much, so this is probably aiming at some kind of “warm-glow” giving, which when aggregated can really add up; the danger being that if people are substituting texting donations for $25 checks, then the campaigns are in trouble.

Finally, the transaction costs here are actually really high–the video said 40% if I recall. That means that even if these are substituting for $7 checks, the campaigns are in trouble. Unless there are some sort of external benefits of voter engagement or something, but yeah…I’m curious whether this is a flash in the pan or a new way of giving that pans out. Read the rest of this entry »

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David Brooks, Romney/Ryan, and the Faustian Shell Game

Do you have gay friends? Colleagues? Loved ones? First things first.

Do you think women should receive equal pay for equal work? First things first.

Do you have sympathy for those who are struggling to find work? First things first.

David Brooks makes an ass out of Uma Thurman and you can tell his heart’s not in it. It’s a shame, because it’d be really nice to read the other version of this column. He frames the column as a “Guide to the Perplexed”, and buries the lede way down in the third-to-last paragraph:

You’re still deeply uncomfortable with many other Romney-Ryan proposals. But first things first. The priority in this election is to get a leader who can get Medicare costs under control.

Oh, so first things first? Okay, so the evidence that Romney/Ryan will do that–get Medicare costs under control–is hard to come by, and the evidence that they will do it without destroying one of the most beloved social programs is even more scant. It’s actually really easy to get Medicare costs under control: just stop paying the bills. I’m guessing there’s some reason that that proposal hasn’t been floated, but the Ryan budget is as close as anyone has gotten. So that’s the Faustian bargain that’s–at least ostensibly–on the table: don’t you care about your grandchildren? Then old people have to take it on the chin.

Medicare spending per capita

Which, if I’m being honest, if I thought there was a chance they could actually do it, well, it might sound appealing. Clearly they can’t, but let’s just assume they can, to ride where Brooks is leading us. Read the rest of this entry »

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I really enjoyed the show Life. I watched the entire run the way I often do–while folding laundry–and the characters were believable, complicated, and surprising; the stories generally good; and the overall feel…well, it felt like a show that was made specifically for me. Also, it had the best series ending of any series I’ve ever seen. It wasn’t overstated; it wasn’t overambitious. It closed out the series. It didn’t feel contrived, like Life On Mars (which I loved, although I have yet to see the U.K. original version). It wasn’t telegraphed and terrible, like Lost. It was surprising and fitting and clean–most of all, it was just…graceful.

It’s a show about a police detective named Charlie Crews who was falsely convicted of a multiple murder, and spent a decade or so in a maximum security prison before getting out (with a sizeable settlement) and then rejoining the force. He comes out…changed. Part of what got him through, it is revealed early on, is Zen philosophy–and he irritates a lot of people in a delightful fashion.
I was discussing this weekend how much I liked Vonnegut’s tendency to reveal key aspects of the end of his stories before they even got rolling–the painting in the barn in Bluebeard, the Tralfamadorian shenanigans in The Sirens of Titan, the chronological complications of Slaughterhouse-Five. Read the rest of this entry »

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Video – Introduction to Statistics part 1

So I’m set up for recording video again. I’ve got a new prep this semester: Business Statistics. The videos should combine with the ones I’ve already posted to create a full 2-course sequence in statistics for business applications. My goal is to post one every Tuesday and Thursday. I hope you enjoy! As always, feedback, positive and negative, is welcome.

Today’s video – Intro to Statistics part 1.


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Home is … somewhere, right?

There was an interesting sermon this week–one I didn’t expect to like–about real estate and home, and how a life is woven in there somehow. It is complicated, the intermingling between the rapidly shifting economic forces that have untethered us and our traditions; the difficulties in negotiating, or even understanding, how we should live differently with constraints lifted, how to take Polonius’s advice to “neither a borrower nor a lender be” when it seems to make so little sense to miss out on record-low interest rates.

I was reminded of Cisneros’ The House on Mango Street, which is a beautiful story.

And it doesn’t make sense. The advice of past generations is not useful, sometimes. And sometimes it is. And picking apart the difference is actually super-difficult.

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