Eric Rasmusen’s Weblog

Visiting Taipei, I saw this brand of coffee for sale in cans, and it is also a chain of coffeeshops. G. said the chain is in India too. Note the design, and how easy it would be for someone who does not read the Roman alphabet to distinguish B AR I STA and STA R B UCKS.

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Some 40 years ago, not long after I attended the Cambridge Grammar School for Boys for a year, many counties in England ended the distinction between academic and vocational government secondary schools. The result was that more of the academic students went to private schools instead, schools which are frighteningly expensive (on the order of 15,000 pounds per year for a boarding school, and day primary schools that I looked at in Oxford were about that, too).

In effect, the government decided to get out of the business of providing academic secondary education, a libertarian step. That’s ironic, though, because it would have made more sense to keep the academic schools and privatize the vocational ones. Smart kids are more likely to have parents who can judge when the government school is doing a bad job and complain, or who will remedy its deficiences. Ordinary kids are more likely to have parents who can tell whether school A is better than school B from their advertizing, but can’t tell whether a monopoly is doing well or poorly.

Here are some travel tips I should have thought about before visiting Taipei:

1. Buy a guidebook in advance.
2. Buy a good map in advance– a plastic one, for use in rain and hard
   to wreck.

3. Bring rubbers for your shoes. They are useful for traction
   too, and for keeping off mud when hiking in leather shoes.

4. Bring a baseball cap for rain and sun.
5. Bring moleskin for feet (I had that).
6. Bring a compass (I had that).
7. Bring pens.
8. Get take-out food from a stall or grocery, to avoid spending time
   sitting in restaurants.

9. Bring plastic silverware (I had that).
10. Bring bug lotion (I had that).
    

I was just giving advice to my student Changmin Lee about going on the American academic job market. Some of the advice I’ll want to repeat, so I’ll put it here. If every foreign student takes this advice, it will help the market work a lot better. And it is a good illustration of how to apply game theory thinking to real-world situations.

1. On your curriculum vitae (resume), put somewhere “A recording of me speaking English is available at http:/www.iu.edu/jkjkjk.mp3, and a movie of me teaching is available at http:/www.iu.edu/jkjkjk.mov.”

You might want to omit the movie, but for a foreign student the recording is crucial. Think of it this way. For Korean students, the employer’s prior is that the job applicant can’t speak English well enough to be worth looking at seriously. You need to provide information to possibly change that belief.

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Brett Stephens has a good op-ed on how the behavior of prominent scientists in global warming makes the non-experts skeptical: (more…)

The WSJ has good commentary comparing crooked prosecutors Nifong and Fitzgerald in “A Tale of Two Prosecutors Mike Nifong is punished, but Patrick Fitzgerald isn’t.”

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The Fed allows banks to borrow “at the discount window” as a lender of last resort. Traditionally, the interest rate has been below the market rate, which seems wrong to me. The Fed only provides this service because there are banks which are truly solvent but can’t get short-term credit anywhere else. By definition, almost, these are banks which are willing to borrow at above the market rate. Thus, it would help to sort out who really needs the funds to charge above the market rate instead of below. Apparently the Fed only figured this out in 2003, a commentor at Marginal Revolution tells us: (more…)

I came across The Gourmet Cello in East-Central Taipei and thought of SW from Perth.

At lunch today we were talking about inheritance taxes. Why are they considered unfair?

I think it is because it is a tax on virtuous behavior. Saving is virtuous compared to spending now. Giving away money is virtuous compared to spending it on oneself. Bequests are both saving and gifts. Hence, to impose a massive tax (say, 40%) on a bequest while imposing small taxes (say, 4%) on selfish consumption is unfair.

From a value-maximizing point of view, the giving away of money has the benefit that it makes two people happy — the giver, and the donor. Also, if taxing investment income is value-demaximizing, inheritance taxes are bad because they are a tax on saving. They tax the principle of saving, not just the return.

David Frum writes of how young Harvard Law professor Noah Feldman is following the shameful style of so many of the older professors in that school. In Feldman’s case, he is not plagiarizing, though. Rather, he is making up stories about his personal life to make his high school and Orthodox Judaism generally look bad. He claimed in a New York Times story that he and his Korean-American girlfriend were deliberately cropped out of a reunion photo. When the Times got the photo to use with the story, it was obvious to them and Feldman that he was wrong– the number of people was simply too big to include them all (so 18 were left out). Since the photo contradicted Feldman’s story, they decided not to run the photo!

Here are two history-book recommendations from Three Hierarchies: (more…)

Luther was right to focus on indulgences as a sign of the corruption in the Roman Catholic Church, not because indulgences were being sold for moeny for improper purposes, but because the very idea of indulgences elevates works over faith and imputes cruelty to God and to the Church. The idea of an indulgence is that the Church can make a special offer that if I perform action X within time period Y, I will spend Z fewer years in Purgatory having my sins punished. This presupposes that the Atonement on the Cross was insufficient atonement for sins– they need to be punished by Purgatory too and in fact our sins are small enough that Purgatory is sufficient punishment. It builds on that to say that some relatively trivial actions while living– say, visiting a shrine– can atone for sins that were bad enough to need years of suffering in Purgatory. That becomes true only because the Church (delegated by God) gives a special allowance, however, which leads to the final implication: the Church (and God) could wipe out all the sufferig in Purgatory with no harm to the universe, yet it chooses not to.

The Roman Catholic church very much still believes in indulgences and offers them now and then. Here a story about a recent one. “Spiritual gift for Catholics in Phila. Archdiocese is offering plenary indulgences” says:

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Here are some Caution from a wise woman: about childrearing:

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How can you get experience of recreational sailing even if you live in Kansas City?

Put on casual clothes and take a broom into a shower stall. Turn on the cold water and start ripping up $20 dollar bills. Every five minutes, hit yourself over the head with the broomstick. Continue until you’re unconscious or out of money.

Clergymen in England had significant legal disabilities as well as privileges. Blackstone’s Commentaries; 1-11 says:

But as they have their privileges, so also they have their disabilities, on account of their spiritual avocations. Clergymen, we have seen,7 are incapable of sitting in the house of commons; and by statute 21 Hen. VIII. c. 13. are not allowed to take any lands or tenements to farm, upon pain of 10£ per month, and total avoidance of the lease; nor shall engage in any manner of trade, nor sell any merchandise, under forfeiture of the treble value.

What pleasures are good? One way to address the question is to ask:

“What pleasures bring us closer to God, and what pleasures take us further away?”

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Why women should pay less tax by Alberto Alesina and Andrea Ichino at the Financial Times, argues that women should pay a lower income tax rate because their labor supply is more sensitive to aftertax wages. That’s true as far as it goes.

Since we are talking about people and not goods, one needs to worry about whether such a policy undermines other social goals. In fact it does not, and this is why social activists should favour it as well. Increasing the labour participation of women is an explicit goal of the European Union’s Lisbon agenda. It sets a very ambitious target for female employment, especially in southern Europe, where women tend to stay at home more.

Yes, this is a well-known point– that women have more elastic supply, and it immediately follows they should be taxed less. Unless– the big unless– you think it’s good that women stay home and take care of their own kids, which I do. If they go to work, the kids are brought up with less adult attention and by people with less talent and interest. Thus, the kids are the losers.

Also, lower taxes on women would reduce their pretax wages, not increase them. There would be the direct Ec-10 effect, and also if more women enter the labor force, they’ll compete their wages down. Post-tax wages do have to increase.

Via CA, this quiz is an unusual one:

R. Amir and M. Knauff’s Ranking Economics Deparments Worldwide on the Basis of PHD Placement, which I found via Greg Mankiw’s Blog, has some surprising conclusions about departmental influence. Harvard and MIT rank at the top, with scores of 100 and 93, which is not surprising. But then there is a huge dropoff, with Stanford, Princeton , CHicago, Berkeley and Yale at 38, 37, 35, 30, 29. There is another giant dropoff to Northwestern, Oxford, LSE, Minnesota, Penn at 9 to 12. Michigan is at 7. Cambridge, Penn State and Rochester are at 5. And it goes down from there.

Steve Sailer reports on a lecturer at Leeds University who has been suspended from his job for publicly stating the obvious fact that IQ differs among races: (more…)