Eric Rasmusen’s Weblog

Via The Right Coast, The
Guardian reports on the London Review of Books’s sympathy for the 9-11 terrorists:…
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We had a good discussion last week in the law-and-econ lunch on bilateral vs. multilateral bargaining vs price-taking. Here’s the story.

Suppose Eli Lilly has a patent monopoly on Zyprexa. Compare four systems:

1. Lilly sets one price and consumers or insurance companies are price takers.

2. Lilly negotiates with each of 5000 insurance companies.

3. Lilly negotiates with each of 50 state governments.

4. Lilly negotiates with just the federal government.

Which would Lilly prefer? ….
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The Weekly Standard had a good election cartoon recently:

I don’t know how accurate it is. It may be that the reason Bush isn’t far ahead now is the $60 million or so of Democratic 527-organization ads that have been slinging mud at him for the past year or so.

On July 8 I blogged on “Kerry, Langston Hughes, Communism, and the Rectification of Names”. Now the Weekly Standard has an article on “Kerry’s Little Red Bookshelf”. It turns out that Langston Hughes is not the only hard-core Communist Kerry enjoys quoting. There is a pattern….
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You may remember the old Confucian question about what a man should do if he is
an a boat with his wife and mother and the boat tips over. Who should he save?
The Confucian answer is, “his mother”, because he can always get another wife….

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The other day I drove to the B-School, intending to go quickly to my office and back. I have a choice between the Near Parking Lot, which is usually full, and the Far One, which is not. On this occasion, I felt a strong pull to try the Near Parking Lot because I was only going in for 10 minutes. Why? I knew that it was irrational. If I save 5 minutes by going to the Near Parking Lot, I save 5 minutes regardless of how long I stay in the building.
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Maybe Clinton is not so exceptional as I thought. It’s just amazing what
absolute lies Kerry gets away with. I’m not talking about just exaggerations, or
honest mistakes, or broken promises, or misstatements about facts that he
learned wrong in briefings; I’m talking about statements which are inaccurate
beyond any dispute or interpretation, and which we have strong reason to think
Kerry knows about.

For example, isn’t it reasonable to suppose that Kerry knows that the crewman he
served longest with on his Swiftboat is calling him a liar? Yet ABC News tells us,
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In the “Friendship” chapter of (p. 63 of one edition I looked at) of Lewis’s >The Four Loves he says,

“In this kind of love, as Emerson said, Do you love me? means Do you see the same truth?— Or at least, “Do you care about the same truth?” The man who agrees with us that some question little regarded by others, is of great importance can be our Friend. He need not agree with us about the answer.

I just realized something funny about the main line of defense for Kerry’s medals: “The Navy gave him the medals, and all the official documents support him”. I don’t mean the the problem that the official documents we can see don’t actually support him, or that he refuses to release many of the official documents, or the problem that Kerry and his supporters refuse to admit that George Bush’s lack of bad reports or Honorable Discharge gives a prima facie case that we should believe he did fine in the National Guard until we hear contrary evidence. No, all that I realized some time ago.

No, the new thing is this: These liberals are saying, in effect,

“It’s unpatriotic to doubt something asserted officially by the US armed forces in the Vietnam War. If Kerry got a medal from the Navy, he must have been a hero– the Navy would never exaggerate, lie, or even get things wrong by accident.”

This, of course, is sneered at as a conservative Vietnam War argument, though I’m not sure conservatives pushed it as much as pro-Johnson Democrats. Can we trust the body counts of Viet Cong dead? Of course– the army says, so, and who is some amateur to dispute it? Is the war practically won (this in 1966, or 67, or 68)? Sure– the army says everything is under control, or will be in a few months if they get another 200,000 men. The armed forces were wrong on these things, and we should expect them to be wrong on medals, for much the same reason– they are exaggerating their own success. Is the Navy full of heroes? Sure– just look at all the medals– so long as you don’t look too closely.

This is not, of course, to say that the army is always wrong, either. They did kill a lot of enemy, and later evidence shows that the Viet Cong were pretty much wiped out in 1968 and that in 1972 the North Vietnamese regulars were unable to conquer a single provincial capital from the South Vietnamese operating with essentially no US ground support (though with lots of air and supply support). And lots of medals were deserved. But the “Trust me. A military officer signed off on it” argument is nonetheless a weak one.

Jim Lehrer, like most newsreaders, has a nice voice that makes it sound as if he
were wise and objective. Not so. Just remind yourself of this passage below
whenever you hear Jim Lehrer talking about the news. The American Spectator
of September 2004 describes this passage from "http://www.pbs.org/newshour/bb/white_house/july-dec04/clinton_7-07.html">Jim
Lehrer interviewing Bill Clinton as

“A prayerful Jim Lehrer approaches the Archbishop of Balderdash, heart
thumping, palms moistening, and, as he genuflects, pants splitting:

From the
July 31 WORLD magazine:

One of the hottest bars in the Chinese city of Nanjing sports only a sofa, a few tables, and tissue paper - a lot of tissue paper. The AFP news service reports that the city’s first “cry bar,” where customers can sit and cry for $6 per hour, is growing in popularity. Owner Luo Jun says he opened the bar when clients of his last business said they often wanted to cry but didn’t know when or where it would be appropriate to do so.

I was just talking with my grad students yesterday about social norms and multiple equilibria. This is a great example of Norm Entrepreneurship. Mr. Jun saw an opportunity, and took it.

UPDATE, SEPTEMBER 5. See also the Gallup interactive state map, which has links to state polls.

The PBS Electoral College Pick-Your-Own-States Map is good. It would be even better if it put the number of electoral votes on each state, if it were accompanied by a table with the 2000 race percentages for each state, and if it could be frozen and saved after the user put in his own changes, but at least it is a start.

My forecast is Bush 328, Kerry 210, with the distribution of states in the map accompanying this entry.

The polls I trust most are at the Rasmussen Report. Note, by the way, that I, Eric Rasmus en, am unrelated to the Rasmussen of that report. I don’t trust any polls very much, though. Bush still has a lot of ad spending to do, and the debates are still to come. Kerry will have even more ad spending (because of the Demo millionaires funding the 527s, where he’s had something like a 60 million to 4 million dollar lead so far– my unchecked guesses), and will also be in the debates. But so far the voters have been hit with huge amounts of free ads for Kerry in the form of the mainstream media’s biased reporting. Bush’s spending and the debates will go a little way towards evening that out.

Has anyone, by the way, calculated the value of the Democratic bias of the media? What I’d like to see is some estimate of the amount of newsprint and TV time that is effectively Democratic commercials, multiplied by the standard ad price for that time. I think it would swamp campaign spending, and would show that if we’re really concerned about campaign finance reform, we should skip the small stuff- the billion dollars or so spent on paid-for ads– and go right to the big money, which is the free ads in the form of news and op-eds.

Swiftvets.com has a very good message board are with good comments l which show how the web can combine the information and experience of thousands of people in a way that a journalist cannot copy. The journalist’s problem is that he does not know which of the many thousands of people has the information– he does not know who to telephone. A website can attract them and get them to elicit their special information.

Here,. for example, is a list that speculates on documents the Kerry camp has on his Vietnam service but is not releasing:
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My wife summarizes the goal of the modern liberal’s perfect society very well:

“You can eat peanuts when you want to eat peanuts”

That is– God doesn’t matter, justice doesn’t matter, virtue doesn’t matter– the goal is to make sure that everyone can satisfy their bodily desires, regardless of whether they deserve to or not or the quality of those desires.

I am quite conscious that this is not a bad description of the standard welfare goal of the science of economics too. We don’t question consumer preferences, or ask whether someone who gets higher utility deserves to or not, or whether utility is all that matters. For most things economists analyze, the Peanut Goal suffices, though. The problems come when we go to public policy more generally.

I’m willing to pass along the letter below, but since so many people, even Kerry supporters, have already wondered why Kerry won’t reveal more than just 6 of his 100+ pages of records and he hasn’t, I’m not sure it’ll help much. I think we can deduce that release of the evidence would wreck his reputation even more.

O what a tangled web we weave,
when first we practise to deceive!

It’s interesting to compare Bush, Kerry-in-August, and Kerry-in-June on this.
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Believe it or not, new flaws in Kerry’s medals keep being discovered! There are some new problems with the Silver Star— (a) the official record lists it as the “Silver Star with combat V,” a medal which doesn’t exist, and (b) there is not just one “citation” saying why the medal was given,but three,by three different bigwigs, and only one of them mentions the “chasing and killing the Viet Cong” incident– the other two are just awards for managing the mission overall. Here is much of the article from
the Chicago Sun-Times, which reports on the findings of fakehunter B.G. Burkett, author of Stolen Valor.
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Herman Jacobs writes:

Never mind that Mr. Cheney has never breathed a word of criticism of Mr. Kerry’s military service in Vietnam. Also never mind that Messrs. Bush and Cheney have never even breathed a word of criticism of Mr. Kerry’s antiwar activities. For them to criticize Mr. Kerry’s antiwar record would violate the second prong of the domestic truce. So in questioning the service, or lack thereof, of Messrs. Bush and Cheney, Mr. Kerry attempts to turn to his advantage the curious fact, mentioned above, that although the domestic truce grants honor to those who fought in the war and grants amnesties to those who actively opposed it , those in the middle (like Messrs. Bush, Cheney, Clinton and Quayle) receive no protection.

A good Economic Systems/Ethics question would be how we would want to structure an altruistic economy.

Suppose we could instill virtue into everybody so nobody lied or stole and everybody cared about everybody else’s utility– but people still had private information. What kind of economic system would attain efficiency?

We would not, for example, want everyone to give away their wealth to the poor, because then the poor would become the rich. We would not want everyone to work hard, because they’d work inefficiently hard, without detailed instructions. Some kind of decentralized system would be needed, probably using prices. But what would it be, since we could now, unlike in an Adam Smith world, rely on morality too?

Human Events is very good on the Kerry Vietnam story. In particular, this interview with John O’Neill is utterly convincing. O’Neill knows how to lay out facts for skeptics in a plain manner.

The Silver Star story is now coming into focus. Kerry beached his boat, jumped out, and pursued and killed a wounded Viet Cong, supposedly under heavy fire. If he’d been under heavy fire, though, why didn’t the enemy overwhelm his helpless boat, and kill Kerry too? And why would Kerry make himself and his boat vulnerable rather than just having his boat kill the wounded Viet Cong with its machine guns? Answer: there must not have been heavy fire–indeed, maybe not any fire. Kerry wouldn’t have gotten a medal if he’d just used the boat’s machine guns, and if the Viet Cong was fleeing, there wasn’t much risk to Kerry or the boat in running after him with an assault rifle, so long as there were no other Viet Cong around. So Kerry went after him personally for sport, so to speak.

O”Neill makes the claim that it is very unusual for a Silver Star not to have any documentation except the after-action report. That is extremely important. Is the medal based on more than just one person’s claims– even if it turns out that the one person is not Kerry, but someone else who wrote the report? I know Kerry’s people keep saying that Silver Stars are based only on multiple corroborating accounts– but what is more precise is that Silver Stars are * supposed* to be based only on multiple corroborating accounts. Kerry broke the rules to get his Purple Hearts, so why not to get his Silver Star?

Thus, the picture clarifies of John Kerry as rigging all his medals, for glory and to get out of Vietnam, after his signing up for the apparently safe Navy job inadvertently thrust him into combat when the Navy decided to send small boats into combat.

Many people are saying, “So what?”. I’m surprised. I know Clinton has lowered standards, but at least Clinton wasn’t running for office as being a wonderful husband and a war hero. Kerry is running as a war hero, when it turns out that he was not.

In fact, even if everything Kerry claimed was true, he did much more for the Viet Cong than he did for America. Four months of minor exploits as a junior officer are nothing compared to the propaganda he put out for the enemy later– propaganda he must have known at the time was false and in aid of the enemy. I wonder if he got a medal from the North Vietnamese– a secret one, like the British spies got from Stalin in the 1930’s?

It is worth reminding everyone about Benedict Arnold, who compares favorably with Kerry. Arnold was a hero both genuine and major. He was a top commander in the Battle of Saratoga, perhaps the turning point in the Revolutionary War, with personal heroism in that battle that crippled his leg. Later, he tried to turn over the fort of West Point to the British, but was foiled. THus, overall, his contribution to the AMerican cause was definitely positive, and major. Kerry made at most small contributions to the American cause while he was a junior officer. Then he made a bigger contribution– not major, perhaps, but something noted in the history books– to the enemy cause. THus, overall, his contribution to the American cause was definitely negative.

But I can’t imagine Benedict Arnold running against John Adams for President in 1796 and saying, “How dare you question my patriotism! While you were doing lawyer stuff in Congress, I was losing the use of my leg by charging Redcoats! Kill some British, and then you can comment on my war service.”

I’m trying to puzzle out the implications of something suggested by Catherine
Mann in the Summer 2002 Journal of Economic Perspectives. She said that in 2001, if investors had simply “held the market portfolio”, allocating their holdings
in proportion to the size of stock markets around the world, they’d have 57% in
US stocks and that global mutual funds do that.
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