Eric Rasmusen’s Weblog

Harvey Mansfield says in The Weekly Standard:

At the meeting many said that the issue was not academic freedom vs. political correctness, as portrayed by the media, but Summers’s style of governing. The point has a bit of truth. Summers is an economist, and there is almost no such thing as a suave economist. The great Joseph Schumpeter, a Harvard economist of long ago, claimed to be the world’s greatest lover as well as the world’s greatest economist (it is said), but he was a singular marvel. The reason why economists are blunt is that words of honey seem to them mere diversion from reason and self-interest, which are the only sure guides in life.

That is well put. Economics is the Dismal Science because it makes tradeoffs, and makes them explicitly: “Do you want 10 more dead babies, or 20 more dead teenagers?” Perhaps because we are accustomed to switching back and forth between words and mathematical notation anyway, we are more indifferent than most people to labels. It is liberating: if you don’t need to worry about whether somebody will find your language insensitive, you can get down to the business at hand undistracted.

Also, economists are used to piercing disguises to find reality, and so we find attempts by scholars to use transparent disguises insult our intelligence. When a businessman says, “I want high prices so the consumer will not have to suffer from low quality discounters,” we hear “I want high prices so I will make a lot of money at the expense of consumers,” and that’s what we repeat, despite the pleas of the businessman that profit was the furthest thing from his mind and that we are slandering him.

As a result, there is more freedom of thought in economics than in most disciplines. We are used to discussing all possibilities, and we are scholarly enough to know that someone may be exploring an idea out of intellectual curiosity rather than because it fits his political objectives. Whether we agree with him or not, we think that Richard Posner’s idea of auctioning off babies for adoption is worth discussing, and that it would be the height of anti-intellectualism to say he shouldn’t even bring up such an idea.

This makes us, I think, more tolerant of non-economic ideas too. If Ward Churchill wants to argue that the 9-11 victims deserved his fate, by all means let him argue that. Maybe he is correct and maybe not, but the idea can’t be ruled out until we hear his reasons– though, of course, our willingness to listen will depend on our estimate of how likely it is that the speaker has something intelligent to say. It is not that we are closed-minded; just that we know we need to ration our time.

Mansfield’s assessment of economics is wonderful because it is both correct and concisely yet poetically critical. Much could be extracted from that sentence.

I am getting fed up with Movable Type. Trackbacks don’t work; the categories don’t have reorganization capability; comments and trackbacks are unprotected from spam; and now for mysterious reasons the index template isn’t working all of a sudden.

I don’t have time to deal with it now, though.

Pastor Whitaker preached one of his best sermons ever today, on forgiveness. He gave three rules from marital forgiveness from Pastor Wangerin or some such person– (1) Focus on the exact sin, not on deductions one makes (”He forgot my birthday” rather than “He doesn’t love me, because he forgot my birthday.”). (3) I forget this one, but it was good. (3) Realize that if you say “I never …” or “He always…” it is almost always a lie. One of the readings was the 23rd psalm, and that inspired me to write up a drawing book for my 4- and 6-year-old daughters. It is in beta-testing, and I have posted the instructions in MS-Word and PDF.

I came across an interesting Dialect Quiz. I come in 45% Yankee, predictably Midwestern except for “grinder” instead of “sub”, due to my Yale days when we’d go out at 10 p.m. or so to get some sustenance for studying from the Greek- owned shops. This quiz isn’t really about being Southern, though that is the summary index. It tells you more about regional dialects. (Via Bob Hayes)

The WSJ yesterday had an op-ed on Medellin v. Dretke which Julian Ku comments on (via VC). A Mexican was convicted of murder in Texas. The police, contrary to a treat the US had signed, had not told him he could talk to his consul. The matter was brought to a foreign court, the ICJ, which said that the Mexican and about 40 others had to be retried. The question before the U.S. Supreme Court is whether this order should be carried out.

This is crazy stuff. Here are two reasons not mentioned in the WSJ op-ed. First. the U.S. violates this part of the treaty routinely. There are literally tens of thousands of foreigners in prison who were not informed they could see their consul, ordinarily because they wouldn’t do it even if they were informed. Is the proper remedy to go to the expense of retrying them all? — Only if you are a foreign court that cares more about politics than common sense. Second, this violates separation of powers in a big way. Treaties are ratified only by the Senate, not by the House of Representatives, and state criminal laws are made by state legislatures interpreted by state supreme courts, not the U.S. Supreme Court or some foreign court. If the Senate can ratify a treaty that regulates criminal procedure, then it can bypass getting 50% of the House to vote for the bill. Also, it can bypass the state governments (and federal courts) and give control to a foreign court. In fact, the Senate could arrange for a foreign court to be especially made for the occasion, composed of members of the Senate on holiday in Geneva.

Here’s how it could work. 1. The President and Senate make a treaty with Haiti saying that any legal dispute involving corporations partly owned by Haitians will be tried in the new SuperFair Court of Universal Justice in Geneva. 2. A helpful Haitian citizen buys one share of each U.S. corporation. 3. The SCUJ is set up, with membership consisting of the members of the U.S. Senate, ex officio, plus one Haitian judge. Bingo! We’ve exempted corporations from U.S. law.

Here’s some info on Meddelin from a pro-ICJ amicus brief:

The Vienna Convention provides that foreign nationals must be informed of their right to communicate with consular officials when they are arrested or detained in any manner. Vienna Convention, art. 36, para. 1.

…

Significantly, the United States has also signed and ratified the Optional Protocol to the Vienna Convention. By doing so, it recognized that the ICJ’s “interpretation or application of the Convention” is authoritative. Optional Protocol, Preamble; art. I.

"http://volokh.com/archives/archive_2005_02_20-2005_02_26.shtml#1109193529">Orin
Kerr and "http://stuartbuck.blogspot.com/2005/02/takings-clause.html">Stuart Buck
and "http:
//therightcoast.blogspot.com/2005_02_01_therightcoast_archive.html#1109296618153
86823">Michael Rappaport have been noting that the Constitution’s Taking
Clause says

Nor shall private property be taken for public use, without just compensation, >

but if read literally it does not prohibit private property to be taken for
*private* use without just compensation. The blogs wonder whether any
textualist
does read it that way. As it happens, we were discussing that very point
yesterday in the Indiana Law and Econ lunch and I, and
Mike Alexeev I think, were indeed reading it that way. . . .

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I’ve collected links to various posts on university misconduct, incompetence, and academic freedom here. I know I should combine some of the posts now, rather than stringing things out chronologically, but I probably won’t get round to it for some years, if ever. . . .
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UPDATE: Well, don’t believe everything you read in the newspapers. Instapundit
tells us that the Honolulu Star-Bulletin blatantly misquoted Ward Churchill. Probably some stupid reporter (a) misheard him, (b) omitted lots of words that he did hear, and (c) failed to check with Churchill on whether he had really said the surprising thing the reporter thought Churchill said. Here’s the correction:

“Let’s cut to the chase, I’m not,” the quote in yesterday’s paper continued.

But a review of video and audio tapes of the speech shows that Churchill
actually said: “Is he an Indian? We really care. We’re trying to protect the
rights of Indians to divine for themselves, say this circle of flies in the form
of white reporters circling a manure pile like it’s of all consequential
importance. Cut to the chase on that.”

Ward Churchill is shrewd. He has admitted that he is not an Indian, this
Feb 23
newspaper article reports. With all the attention focussed on him, the truth
was sure to come out anyway, so he is smart to have it come from his
own mouth first, so he can spin it.
(Via
Instapundit)

I’ve been teaching the subject of public utility regulation this past week. There are two ways to regulate an industry which is a natural monopoly, with economies of scale (decreasing average cost):

1. P=AC. Set the price to equal the average cost.

2. P=MC, Subsidy. Set the price equal to the marginal cost. The firm will then have operating losses, so make up for that with a subsidy. . . .

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These interest rates from today’s WSJ may be useful for thinking about social security reform:

Inflation-indexed US 2007 bond: .7%

Inflation-indexed US 2032 bond: 1.8%

Merck 2015 bonds spread over US bond: .7%

GE Capital 2012 bond spread over US bond: .4%

GM 2033 bond spread over US bond: 3.7%

Metlife 2034 bond spread over US bond: .9%

The Catholic Church continues to amaze me with its tolerance of homosexual and
pedophile priests. The latest I see is a report that convicted pedophiles in at
least one diocese are not defrocked and continue to get paid and a report that
in another diocese a priest has been removed from ministry (though not
defrocked) for whistleblowing. The first story is from this
"http://www.cmonitor.com/apps/pbcs.dll/article?AID=
/20050218/REPOSITORY/502180364/1031">New Hampshire article.

. . .
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The President seems to have reversed the university’s punishment of Professor
Hans Hoppe, the economist who lost a year’s pay for saying in class that
homosexuals have higher time preference (see my "http://www.rasmusen.org/x/archives/000445.html">page of links here). . . .
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In 1995, 50% of the population supported the death penalty for drug smuggling.
See this
Harvard study which cites data from Gallup.

There are a number of ways into which churches may be divided into three categories. Here they are.

1. God the Father. Ectomorphic/Cerebrotonic. Thinking. Right Belief. Theology. Fatalist. Deterministic. Calvinist. Preaching.

2. God the Son. Mesomorphic/Somatotonic. Doing. Right Actions. Legalist. Free Will. Methodist or Roman Catholic. Song and Ritual.

3. God the Holy Ghost. Endomorphic. Feeling. Right Sentiments. Antinomian. Unconcerned about Free Will. Baptist or Pentecostal. Praying.

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I read in the Chronicle of Higher Ed that U. Mass is planning to add a law school by merging with the Southern New England School of Law, as this
December 2004 press release says. This is like the strategy of George Mason University, which successfully bought a fifth-rate law school, and Michigan State, which is doing the same thing. George Mason was successful because it fired lots (most?) of the faculty, which makes buying the fifth-rate law school seem pointless. The Southern New England School of Law isn’t even accredited– it has twice failed to gain accreditation.

“This is a win-win situation for the University of Massachusetts and the law school,’’ said Southern New England School of Law Chairperson Margaret Xifaras. “We are proud to have built a first-rate facility, a strong library, a talented faculty and an academic program that has already been endorsed by the Massachusetts Board of Higher Education and the New England Association of Schools and Colleges. We have made measurable and documented progress toward attaining our next goal: national accreditation by the American Bar Association.

Why, I wonder in all three cases, did a university of moderately good reputation choose to acquire a bad law school rather than start from scratch? I suppose the buildings are worth something. But why acquire tenured faculty who are worse than useless, and a history and reputation of low quality?

I went to a grad student Bible study today and had 4 insights into Ecclesiastes that I had never had before: (1) It supports the Lockean/free-market theory of private property; (2) It attacks the Darwinian fitness idea of the summum bonum; (3) It attacks the modern American idea of the summum bonum as living a long time and satisfying appetite; (4) It starts from the premise that wisdom is good, rather than saying wisdom is vanity. Here are the passages: . . .

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I’ve blogged before on the case of Professor Hans-Hermann Hoppe at Nevada who was punished for casual classroom remarks on homosexuals and time preference, on
February 6 and
February 8. I haven’t had time to develop the story, but I’ve accumulated some links. . . .
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Professor Kreft pointed me to
a site which replaces
the Monroe County
platbook, great maps showing who owns which plots of property. You can move
around the entire city and county, and see who owns which beautiful house, as
well as who lives in your neighborhood.

Suppose Smith agrees to work for BigTV at a salary of $100,000 per year. The
exposure is worth $300,000 to Smith, and Smith’s talent is worth $500,000 to the
company, so the deal splits the value equally between them. But then BigTV gets
angry at Smith, whose talent value drops to 0, and takes him off the air while
continuing to pay him. Should Smith win a lawsuit against BigTV?
Via Drudge, the
New York Observer we
find a case that is a little like this, in connection with Rathergate: . . .

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The two common justifications given for social security are that (a) without
social security, old people would be poor, and (b) we need to force people
to save for the future lest in their old age they starve or go on public
charity. Neither of these reasons justifies a program like the one we have,
where all income-earners are taxed in their youth and paid pensions in their
old age.

Reason (a) is a reason to have public charity include old people who cannot work
as well as young people who cannot work. As far as I know, that is currently the
case. Thus, we don’t need social security for it.

Reason (b) is, at most, a reason to make sure that everybody who can save does
save for
their old age. I would say, myself, that if someone could have saved for their
old age and didn’t, then we simply should not put them on public charity.

But suppose we don’t want to make people pay the penalty for their
improvidence. Even then, reason (b) doesn’t apply to most people, because most
people *do* save, even in addition the forced saving of Social Security, and
they would save even more if Social Security. Most people save, if only in the
form of owning a house (which they could sell in their old age) or by means of
an employee pension plan. At a minimum, Social Security should exempt all of
those people from paying tax or getting benefits. We do not need to force Bill
Gates to provide for his old age.

Going a step further, another common way to provide for old age is to have
children. Someone with eight children should not have to worry about starving in
their old age. If we do not already, we should require that children maintain
their old parents, just as we require parents to maintain their young children.
And we should exempt someone with children from being in the Social Security
system. They have invested for their old age in raising children. And in their
old age, their own children should pay taxes for their pensions, not other
people’s children.

Going two steps further, for the few eligible people left, why require them to
do their forced savings via a low-yield government program? All that is
necessary is to force them to contribute to a pension plan, much as in the
private-account plans.

Going three steps further: how many of the improvident who would not save for
their old age actually would reach old age? If someone is reckless enough not to
save, maybe he will die early in one of numerous ways (shootings, accidents,
drink, drugs, AIDS) that affect reckless people. In fact, if you plan to burn
yourself out by age 40 it is irrational to invest in a pension plan.

Little mentioned is the corrupting moral effect of Social Security. For
one thing, it encourages improvidence, because a person can count on a
government pension even if he saves nothing himself. For another, it encourages
filial impiety. Instead of caring for my parents myself, I can shrug them off
as the government’s responsibility.