Catching up

So I am utterly exhausted...I finished mid-terms today and I give myself a B-/C+ overall. I have tested the limits of my body and brain's ability to comprehend things when pushed to the edge. I actually had to ask myself the other day what the first derivative of Total Revenue with respect to quantity was! Bogdan made me take a break at that point.

I wish I had another 2 days to study for each of the exams. I missed some I should have gotten and we shall see how it all plays out. My strategy for the rest of the semester is to stay as far ahead of the game as possible.

I decided this is the hardest thing I have ever done. Cooking for 18 hours is a joke by comparison. I would rather pull a 100 hour week rather than go through what I've been through. Maybe I am just older and weaker. I guess a PhD shouldn't be easy to get.

I must say though...through some discussion over the past week or so I have realized that I enjoy economics. Even though I was thinking about it 18 hours a day, I still found time to read a few chapters of Hayek's Individualism and Economic Order and debate the robustness of the beta matrix in ordinary least squares regression under both binary independent and dependent variables. I really love it and even though my poor, sleep deprived brain was fried, I found enjoyment this morning when I figured out a proof on my exam.

Ok so some housekeeping (random thoughts):

1. So I love my Treo 700w. I think Palm has the opportunity to make something good even better when their next generation of phones come out. My suggestions:

a. Let the media player and other aps that use sound play over Bluetooth.
b. Make an option to disable the touchscreen in a call but press a specific button to allow
access.
c. Crashing IS a problem.
d. Can we do ANYTHING to allow IE to browse non-xtml pages faster
e. How about a flash player/pdf reader? (I want to watch MLB.tv and NHL Center Ice Net)
f. Better control over system memory.

2. Vouchers

This may surprise you, but I am against vouchers. It doesn't make schooling competitive. The argument reminds me an awful lot of Lange's (1936) revision of socialist calculation. Vouchers are still paid for by taxes, so for me, the discussion ends there.

3. A good piece on minimum wage over on Jeff Miron's blog. One of my favorite, clearest libertarian economists.

4. More later.

Appalling article of the day

Shouldn't the finding of evidence of biological tendencies to homosexuality finally put the debate over "immoral" behavior to a rest?

Apparently not.

Religion keeps moving farther and farther from science and rationality. People ARE stupid:)

Iraq News

Everyday I go to Yahoo to check my email and my fantasy sports teams. Every day for the past four years the top line on the news is "** U.S. Troops killed by roadside bomb."

What bothers me is how unremarkable that heading has become.

Democracy and Development

The Econ blog on WSJ ran this discussion between Acemoglu and Glaeser. Interesting since I have been debating, both internally and with friends, whether democracy is necessarily a good thing. The end result, so far, is that I believe that although it may be good for capitalism, democracy may not be good for all people and we risk falling into the paternalism trap by wishing it upon all people. A friend of mine from the former Soviet Union recently hypothesized that democracy is bad for the Russian people because they have a cultural tradition of strong, autocratic leaders. Likewise, the Atlantic Monthly ran an article some years back stating much of the same idea.

Thanks for the pointer to Pete Boettke at The Austrian Economists.

Great satire about economics

Life Among the Econ

Thanks to Marginal Revolution

From CSM

Want world peace? Support free trade.

By Donald J. Boudreaux

FAIRFAX, VA. – Everyone knows that a key to the Democrats' big electoral win was their opposition to the Iraq war. But also, as the Wall Street Journal reported recently, "Democrats' stances against free trade helped build the party's success at the polls and could tip the balance on trade matters. The new dynamic could put a definitive end to the already troubled effort to reach a global agreement to reduce tariffs and open markets...."

Protectionists (of whatever party) believe that consumers who buy goods and services from foreigners cause domestic employment - and wages - to fall. Economists since before Adam Smith have shown that this belief is mistaken, largely because foreigners sell things to us only because they either want to buy things from us or invest in our economy.

These activities employ workers here at home and raise their wages. Mountains of empirical evidence show that protectionism is economically destructive. The facts also show that protectionism is inconsistent with a desire for peace - a desire admirably expressed by many Democrats during the recent campaigns.

Back in 1748, Baron de Montesquieu observed that "Peace is the natural effect of trade. Two nations who differ with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities."

If Mr. Montesquieu is correct that trade promotes peace, then protectionism - a retreat from open trade - raises the chances of war.

Plenty of empirical evidence confirms the wisdom of Montesquieu's insight: Trade does indeed promote peace.

During the past 30 years, Solomon Polachek, an economist at the State University of New York at Binghamton, has researched the relationship between trade and peace. In his most recent paper on the topic, he and co-author Carlos Seiglie of Rutgers University review the massive amount of research on trade, war, and peace.

They find that "the overwhelming evidence indicates that trade reduces conflict." Likewise for foreign investment. The greater the amounts that foreigners invest in the United States, or the more that Americans invest abroad, the lower is the likelihood of war between America and those countries with which it has investment relationships.

Professors Polachek and Seiglie conclude that, "The policy implication of our finding is that further international cooperation in reducing barriers to both trade and capital flows can promote a more peaceful world."

Columbia University political scientist Erik Gartzke reaches a similar but more general conclusion: Peace is fostered by economic freedom. Economic freedom certainly includes, but is broader than, the freedom of ordinary people to trade internationally. It includes also low and transparent rates of taxation, the easy ability of entrepreneurs to start new businesses, the lightness of regulations on labor, product, and credit markets, ready access to sound money, and other factors that encourage the allocation of resources by markets rather than by government officials.

Professor Gartzke ranks countries on an economic-freedom index from 1 to 10, with 1 being very unfree and 10 being very free. He then examines military conflicts from 1816 through 2000. His findings are powerful: Countries that rank lowest on an economic-freedom index - with scores of 2 or less - are 14 times more likely to be involved in military conflicts than are countries whose people enjoy significant economic freedom (that is, countries with scores of 8 or higher).

Also important, the findings of Polachek and Gartzke improve our understanding of the long-recognized reluctance of democratic nations to wage war against one another. These scholars argue that the so-called democratic peace is really the capitalist peace.

Democratic institutions are heavily concentrated in countries that also have strong protections for private property rights, openness to foreign commerce, and other features broadly consistent with capitalism. That's why the observation that any two democracies are quite unlikely to go to war against each other might reflect the consequences of capitalism more than democracy.

And that's just what the data show. Polachek and Seiglie find that openness to trade is much more effective at encouraging peace than is democracy per se. Similarly, Gartzke discovered that, "When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict."

These findings make sense. By promoting prosperity, economic freedom gives ordinary people a large stake in peace.

This prosperity is threatened during wartime. War almost always gives government more control over resources and imposes the burdens of higher taxes, higher inflation, and other disruptions of the everyday commercial relationships that support prosperity.

When commerce reaches across political borders, the peace-promoting effects of economic freedom intensify. Why? It's bad for the bottom line to shoot your customers or your suppliers, so the more you trade with foreigners the less likely you are to seek, or even to tolerate, harm to these foreigners.

Senators-elect Sherrod Brown (D) of Ohio and Jim Webb (D) of Virginia probably don't realize it, but by endorsing trade protection, they actually work against the long-run prospects for peace that they so fervently desire.

• Donald J. Boudreaux is chairman of the economics department at George Mason University.

China moving forward

China took a step forward today towards what I consider to be the most important agent of free market economy. Now if South America and African states could make this change as well...

Ironic

Isn't it ironic that UPS's new commercial uses The Postal Service as their soundtrack?

http://www.youtube.com/watch?v=WpTWU7vwNtY

Who next?

From the Journal...

Protectionists Never Learn

By RUSSELL ROBERTS
March 12, 2007; Page A15

I'm thinking of a country. America's trade deficit with this country just reached an all-time high. This country holds more U.S. Treasuries than any other foreign country. It's one of the world's largest economies. And the name of that country is?

Japan.

Japan? Yes. Remember when Japan was a big threat to the American economy? You have to go back to the late 1980s. Back then, every politician in the mood for pandering to economic ignorance could scare a bunch of folks with worries about how the Japanese were stealing our jobs. How our trade deficit with Japan was going to destroy the American economy. How the Japanese economy was soon going to pass America's. How the Japanese auto industry was part of a sinister strategy to destroy our core competencies.

Job thief

You'd think Japan would still make good political fodder. The story of the baseball off-season is the Red Sox spending $100 million to bring Daisuke Matsuzaka from Japan to the United States. Dice-K, as he's known, is the ultimate import. He takes away a job from an American pitcher. And the Japanese baseball teams discriminate against American players with strict quotas. But even though America's trade deficit with Japan just hit that all-time high, no one uses Dice-K as a symbol of unfair Japanese trade policy.

Why not? Instead, it's China all the time. We're told that China cheats on its currency, stealing America's manufacturing capacity and destroying American jobs. China's holdings of U.S Treasuries threaten our sovereignty, according to Hillary Clinton, even though Japanese holdings are almost twice as big.

Why isn't Japan just as scary as China? One answer is that Matsuzaka smiles too much. He's only scary if you're 60 feet 6 inches away from him, trying to hit his famous gyroball with a wooden stick in your hand. And unlike other imports, it's easy to see how he doesn't just help his relatives in Japan with all that money he's getting from the Red Sox. He helps the Red Sox. Trade makes both parties to the trade better off.

But still. Why isn't Japan scary?

One answer is that the doom-and-gloomers already tried, but nothing happened. They told us that Japan was going to destroy our economy. They told us we needed a plan to cope with brilliant Japanese economic strategies. But then the Japanese economy hiccupped and played Rip Van Winkle for a decade, while America kept growing.

The real reason Japan isn't scary is because it wasn't and isn't a threat to our standard of living. Trade makes both parties better off, remember? But when Japan slumps and the U.S. surges, it's too hard to fool people with bad economics.

So when the sky didn't fall, a new candidate had to be found. Mexico and Nafta fit the bill. Not Canada, even though Canada was part of Nafta. Evidently, politicians and some voters find Mexicans more scary than Canadians. So it was Mexico. When that great "sucking sound" was never heard, a new sinister foreign nation had to be found. And so it's the turn of the Chinese.

Yes, China holds a lot of our bonds. But Japan holds more. Yes, we run a big trade deficit with China. But that lets us buy lots of inexpensive stuff instead of having to make it for ourselves. Yes, there are more than a billion Chinese. I guess that means they can take all of our jobs four times! But our economy keeps growing. We have more jobs than ever before. And contrary to popular belief, the American standard of living and the American middle class are thriving.

We were told that at a minimum China (and India with its own billion-strong population) would take all our high-tech jobs. But the high-tech sector bounced back from its downturn (a downturn that had nothing to do with outsourcing) and is growing again, partly because we can get some of the simplest database and programming tasks done so cheaply by Indians and Chinese.

So why can politicians still make China scary? Why didn't Americans learn from the previous sky-is-falling episodes? The simple answer is that if you don't understand economics, you might be convinced by a politician who says that trade with China is bad for America.

The next time you find yourself losing sleep over China, remember that you were worried about Japan and Mexico and everything turned out OK. Then ask yourself if America would be a richer country if China cut itself off from the rest of the world.

Mr. Roberts is professor of economics at George Mason University and a research fellow at Stanford's Hoover Institution.

Restaurants-econ

Just had a great dinner/conversation with a good friend. We went to Jaleo, Jose Andres' place in Gallery Place. It was my 4th or 5th time and is one of my favorites in DC.

One of the things we were discussing was the restaurant business. I know Tyler Cowen was talking about a paper on the restaurant business at one point, but I had a thought. The restaurant industry is as close to perfect competition as it gets. There are many small firms, price takers, none of whom can individually affect the market. There is fairly free entry and exit from the market. People obviously have preferences, but there is always a substitute. Information is fairly easy to obtain regarding prices etc. Trading costs are low. Food profits are nearly zero, especially in fine dining restaurants. We know that the supply curve is maximized because of the high failure rate.

I will write a paper on it at some point.

2007 NCAA Bracket thoughts

Midwest

*Arizona-Purdue is interest...kind of surprised AZ wasn't ranked higher, but Purdue is going to wreck the finesse of the Wildcats

*Butler a 5?? They beat Tennessee and Gonzaga early in the year but very up and down since...losing to Wright St in the conference championship...they will probably lose to Maryland.

*The UNLV-GT rankings are switched...GT should romp.

*TAMU could upset Wisconsin...you heard it here first

West

*UK got an 8???? They shouldn't even be in the tournament.

*VA Tech should surprise...should be ranked higher.

*IU and the Zag's seeds are switched

East

*UT should be ranked higher.

* Don't see many upsets in this bracket...BC is vulnerable if they don't show up...Really bored by this region

South

*I really like A&M.

*Memphis is overrated...they played nobody non-conference and CUSA sucks.

*Nevada-Creighton is a good matchup...should be a fun game

Sweet 16

FL, MD, Ore, GT, Kansas, VA Tech, Duke, UCLA, UNC, Texas, Vandy, Gtown, OSU, VA, A&M, Nevada

Elite 8

FL, Ore, Kansas, UCLA, TX, Gtown, OSU, A&M

Final Four

FL, TX, Kansas, A&M

National Chanpion

Kansas

From the Buffalo News

I wrote about this a while ago...this is the follow-up. FYI, Sister Karen was my 5th grade math teacher.

FROM SISTER KAREN’S JOURNAL: “I forgive you for what you have done and I will always watch over you.”
Sister Karen predicted her murder 16 years ago, forgave her killer
Letter in journal read aloud inside courtroom by sister of anti-violence nun as Lynch gets maximum prison term
By Maki Becker
Updated: 03/08/07 7:59 AM

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Fifteen years before Sister Karen Klimczak was strangled by an ex-convict on Good Friday, the Buffalo nun wrote a letter of forgiveness to her killer.

She apparently had a premonition, perhaps during her prayers or a dream just before Holy Week in 1991, that her life would one day be taken violently.

Wednesday, as Craig M. Lynch — convicted in December of her murder — was about to be sentenced to 25 years to life behind bars, Sister Karen’s sister and fellow nun, Sister Jean Klimczak, read the letter aloud to a packed, hushed courtroom.

“ ‘Dear Brother, I don’t know what the circumstances are that will lead you to hurt me or destroy my physical body,’ ” Sister Jean read.

She found the letter while going through Sister Karen’s peach-colored journal in which the slain nun had neatly handwritten the letter. Her reading was made all the more gripping because of her striking resemblance to her dead sister.

“ ‘No, I don’t want it to happen,’ ” she read softly. “ ‘I would much rather enjoy the beauties of this earth, experience the laughter, the fears and the tears of those I love so deeply!’ ”

Sister Jean continued: “ ‘. . . Now my life has changed and you, my brother, were the instrument of that change. I forgive you for what you have done and I will always watch over you, help you in whatever way I can. . . . Continue living always mindful of His Presence, His Love and His Joy as sources of life itself — then my life will have been worth being changed through you.’ ”

Sister Karen’s words drew tears Wednesday morning from those in the courtroom — many of them nuns wearing T-shirts bearing the words “I Leave Peaceprints” that had been designed by the late nun.

But her letter of forgiveness did not sway Deputy District Attorney Frank A. Sedita III from asking Erie County Judge Sheila A. DiTullio to impose the maximum sentence — 25 years to life in prison.

“There’s been talk of forgiveness,” Sedita said. “But, judge, forgiveness is for God. Sentencing is for court.”

He pointed out the almost unbelievable nature of the murder.

“How can you imagine a crime more heinous than killing a nun on Good Friday and then stashing her body into a shallow grave on Easter Sunday?” Sedita asked.

Sister Karen’s murder came as a horrible shock to her friends, colleagues and many in Buffalo who knew her as the fiery and tireless nun who had devoted her life to peace and worked closely with criminals and victims of crimes alike.

She was famous for the giant dove-shaped sign in front of her halfway house on which she logged the number of days between homicides in Buffalo and for being the force behind popular lawn signs that read: “Nonviolence begins with me” and “I Leave Peaceprints.”

On April 14 — Good Friday — authorities say Lynch, who had been released to Sister Karen’s halfway house from prison just nine days earlier, sneaked into her room to steal her cell phone to sell for drugs. Lynch later told police that he was high on crack cocaine at the time and wanted to buy more.

But Sister Karen walked in on him, and Lynch strangled her and struck her, killing the nun.

The murder took place just a floor above where her friend the Rev. A. Joseph Bissonette was beaten to death during a robbery in 1987 and for whom the halfway house was renamed.

Lynch ditched some of Sister Karen’s clothing in a dumpster, then hid her body behind his mother’s garage.

Then on Easter Sunday, as a massive search was under way for Sister Karen, he moved her body again — this time into a shallow grave in a shack behind a vacant house across the street from his mother’s home.

The next day, he confessed to police what he had done and showed them where he had buried Sister Karen.

Wednesday, Lynch, 37, casually dressed in a white T-shirt, looked ashamed and, at times, distraught.

Tears often welled in his eyes, and he wiped at his mouth with his cuffed hands as he grew emotional. He managed a weak smile as he noticed his mother and other family members in the courtroom.

Lynch stood silently as the judge asked him if he wanted to make a statement to Sister Karen’s family and friends.

“Would you like to apologize?” DiTullio asked Lynch.

He hung his head and breathed heavily.

Sister Karen’s friend Sister Roz Rosolowski, a chaplain at Attica Correctional Facility, whispered audibly: “Say it!”

Lynch eventually began to talk.

“We didn’t have to go through this,” he said repeatedly, apparently referring to the trial process.

Lynch had confessed numerous times to the killing, although he and his attorney have consistently blamed his crack addiction for his actions.

The defense attorney, David R. Addelman, explained to the judge that Lynch was remorseful for putting Sister Karen’s family through the trial and that he was genuinely sorry for having killed the nun.

“Would you like to say that?” DiTullio prodded Lynch.

After a long and uncomfortable pause, he spoke.

“Of course, I’m sorry,” Lynch said, his chest heaving. “Words can’t describe how I feel.”

Addelman asked DiTullio to consider sentencing Lynch to 15 years to life in prison, pointing out his 15-year addiction to crack as well as the fact that a jury that convicted him of second- degree murder, robbery and burglary acquitted him of any intent to commit the crimes.

DiTullio then told Lynch and the courtroom that she acknowledged the seriousness of drug addiction.

But she also emphasized the gravity of what Lynch had done — and the remarkable life he had erased through his actions.

“You killed an exceptional person, to put it mildly,” DiTullio said.

The judge talked of Sister Karen’s devotion to her work at the halfway house and how she often gave up spending holidays with her family to spend with the parolees she lovingly referred to as “my guys.”

“You, Mr. Lynch, let Sister Karen down,” DiTullio said. “I know deep down in your heart you know that.”

She then sentenced him to the maximum: 25 years to life.

As Lynch was led away, he looked back sadly several times toward his mother and toward Sister Jean.

Then, Sister Jean got up to hug her siblings and embraced Lynch’s mother, as she had done many times before since the murder. She also made sure to thank the Buffalo police detectives who solved the case.

“Because of you, we could celebrate Karen’s life,” she told Detective Sgt. James Lonergan as she gripped his hand.

Before leaving, Sister Jean told reporters that she felt as if her sister was speaking through her as she read the words from her journal to the courtroom.

“I experienced her spirit in reading her words,” she said.

She also said she was not disappointed in Lynch’s clumsy apology.

“Karen would accept whatever people were able to say without any expectations,” she told The Buffalo News. “We do our best.”

Lynch’s cousin Judith, who attended the sentencing, said she believes that her cousin is truly remorseful and that his punishment is just.

“It’s real sad what happened to the nun,” she told The News. “I understand that he was on drugs, but that’s no excuse for what he did. I feel very sad for the family.”

She said her family members have been deeply moved by the love and forgiveness Sister Karen’s family have shown to them and to Craig.

“They really did reach out to us,” Judith Lynch said.

Maggie McAloon, chairwoman of the “peaceprint” nonviolence committee at Bissonette House, who also came to the sentencing, said she and others are now preparing a commemorative Mass for Sister Karen on April 14 in SS. Columba & Brigid Catholic Church.

But she also said Sister Karen’s life is being memorialized in many other ways.

After popularizing the “nonviolence” lawn signs, Sister Karen had come up with the doveshaped “peaceprints” logo.

She had printed several thousand lawn signs with the new motto and, at the time of her death, was trying to figure out how best to get them to the public.

They were given out at her funeral, which thousands attended.

Since then, McAloon said, 15,000 of the lawn signs have been printed and given away, with versions of the signs now on display as far away as Brazil and the Palestinian territories, and “I just ordered 2,000 more.”

http://buffalonews.com/101/story/27978.html

A Piece on LVM

Standup Economist

23x+43y'

2 scary occurrences that make me sure I have been doing too much math:

1. I was trying to say a mathematical formula and I couldn't say it in words and had to write it in mathematical notation....not that I didn't know how to say it in words...I just forgot the words.


2. I was looking at the RPI rankings and I sorted them by win-loss record over the past 10 games. I was scanning them looking for Maryland for about 5 minutes and couldn't find it. When I looked for their RPI ranking, (10) btw, I found it in 2 seconds.