Friday, May 30, 2008

Story Corps Interview

On Saturday, May 24 my wife and I went with her maternal grandmother to the Nashville Public Library. They have a Story Corps booth on the second floor. The interview was fascinating and emotional. Maybe they'll play a clip of it on NPR some day. The questions mostly focus on family and life experiences, but I do manage to sneak in a couple sort-of-economics questions in the second half.

I've uploaded the audio in mp3 format. I had to reduce the audio quality and split the file in half in order to make it downloadable without requiring a login. You can listen to part 1 here, and part 2 here. If you have a Fileshack membership you can listen to the full interview in one file here. Be warned, the first two files are around 17 megabytes, and the third (complete) file is around 34 megabytes. They may take a while to download, depending on your connection.

Thursday, May 29, 2008

Hate Crimes and Efficient Deterrence

After having lunch with Art Carden today, I decided that the following stuff was sufficiently sensible and interesting to justify a blog post.

The typical economist's argument in favor of punishment for a crime is deterrence. Crimes that cause more damage, other things equal, should be punished more severely. Of course, this is subject to complications due to marginal deterrence. It has been my impression, however, that most economists are uncomfortable with hate crime legislation. Hate crime legislation raises the punishment for offenders who commit crimes for bigoted reasons, or adds additional criminal charges (I am ignoring legislation that makes certain kinds of speech illegal, as I think that is different and much more likely to be a bad idea). Either way, it raises the expected punishment for such crimes. Does this make any sense? Surely what matters is the damage from the crime, rather than reason the criminal committed it, right?

But suppose that, other things equal, a criminal who commits a crime because he or she did not like the victim's race is more difficult to deter. That is, suppose such a criminal is more willing to put up with punishment (either because he or she believes strongly in his or her cause, or because he or she is blinded by rage, or whatever). Then raising the punishment for this sort of crime might make sense--it is harder to deter, so the punishment must be more severe, even if the damage is the same. Legislation might not be necessary to achieve this; judges could simply decide to issue harsher sentences for crimes apparently motivated by bigotry.

I thought this argument was somewhat novel. I see on Econlit that Dhammika Dharmapala has a few papers (coauthored with others) that seem to make similar arguments. I do see a problem with this form of legislation, however, in that it might be simple for criminals to avoid hate crime charges by hiding their racism. Evidence is required to show that a crime was racially motivated; it surely would not be very difficult to conceal this evidence (or never let it come into existence).

Art and I also discussed the difference between punishment for premeditated crimes and "crimes of passion". In general the law penalizes the former more severely than the latter. It seems to us, however, that this is backward. A murderer who carefully considers his crime is much more likely to take into account the possible punishment than someone who acts on the spur of the moment. To get the latter criminal to consider the punishment, the punishment had better be more severe if he acts impulsively. That is, we want to design the law so that it makes people ask "is this a good idea?" before acting. Having lighter punishments for people who act irrationally on the spur of the moment is exactly the opposite of what we want. If, as Bryan Caplan suggests, people have downward-sloping demand curves for irrationality, then if we want them to consume less irrationality, we want to raise the price.

There is some evidence that probability of punishment is more important for deterring young criminals, and severity of punishment is more important deterring adults (Lee and McCrary have a paper on the subject, I think). Perhaps there is a similar distinction for hate crimes; maybe greater probability of punishment would be more effective than more severe punishment. On the other hand, increasing the probability of punishment may be more costly than increasing the severity (depending on whether hiring more police is more costly than housing prisoners for a longer period of time).

Thursday, May 15, 2008

Oil Prices

Art Carden has a good post up on oil prices over at Division of Labour. Arnold Kling discusses oil prices and a disagreement with Paul Krugman over at Econlog. I think Art and Arnold Kling are correct. Supply and demand (including the operation of futures markets) explains the current high price of oil. In order for oil prices to come back down, there will have to be a relaxation of supply constraints (no more attacks on facilities in Nigeria, more oil production from Iraq, etc.), or a reduction in demand (perhaps due to improvements in alternative energy technologies). I'm not quite as confident as Kling or Caplan (or Krugman) that this is not a bubble, but that's because I don't really understand bubbles.

Thursday, May 08, 2008

Contrasting Libertarian Views on Barack Obama

I found these blog posts by David Friedman and Bryan Caplan interesting in that they have differing takes on Barack Obama, even though both seem to like him.

Friedman's take is that Obama's positions are closest to libertarian of the three candidates, so Friedman therefore prefers him (although he says in a comment that he will still vote Libertarian). Caplan also seems to like Obama, but says that his likeability is more likely to help him get his way, resulting in bigger government. He'd prefer to have someone like Clinton or McCain in office, on the grounds that it would be more difficult for them to get anything done. Both strike me as reasonable positions, although I think I lean somewhat closer to Friedman's view.

Monday, May 05, 2008

Finally, a Disagreement with Caplan

I'm a big fan of Bryan Caplan, but I finally found something about which we can disagree (inspired by an online conversation on the subject today). He put up a somewhat tongue-in-cheek argument for why Hillary Clinton's proposed gas tax holiday is a good idea. Economists have overwhelmingly denounced it as a policy that would do nothing--that is, it's really just pandering.

Responding to his points one at a time:

1) The policy won't do much harm, and might mollify ignorant voters who otherwise might push for an even worse policy, like price controls.

Response: This is the best of Bryan's three arguments. It might be right; it's hard to know. Let's assume that gasoline prices stay high through the next year, and that Hillary Clinton is elected. Suppose she pushes through her gas tax holiday in February. When the summer driving season hits, gasoline taxes are going to rise again. The fact that an almost entirely ineffective policy was already enacted will not, I think, deter voters from pushing for additional stupid policies.

2) Even if the tax break is entirely enjoyed by the producers of gasoline, rather than the consumers, this is good because other populist measures are likely to harm the oil companies. The two effects balance out.

Response: I think Bryan is forgetting that Hillary Clinton has proposed a windfall profits tax to go along with the tax holiday. If oil companies are hoping for something to counterbalance future painful policies, they won't find it in Hillary Clinton's proposal.

3) The tax cut would only be expected to have zero effect on prices if there were a global gas tax. The fact that the tax cut would apply to the U.S. only would lure oil into the country, resulting in a lower gasoline price.

Response: This would be true if the U.S. refineries were not operating at capacity. Unfortunately, however, there is very little, if any, excess capacity available (to make matters worse at the moment, refineries are switching over to summer blend gasoline, removing some capacity from production). Extra oil coming into the U.S. cannot, in the short run, be translated into extra gasoline. I therefore would not expect gasoline prices to fall. Furthermore, let us suppose that the gasoline tax holiday would reduce gasoline prices. there are many economists who believe that we should be encouraging consumers to do more to reduce gasoline use (for reasons of greenhouse gas emissions, particulate emissions, and congestion externalities). If we can't get Congress to impose a higher gasoline tax, we should at least encourage them not to take policy action to push prices lower.

Sunday, May 04, 2008

Comments on Iron Man

The wife and I saw Iron Man last night with Art and Shannon Carden. It was pretty darn good. There is a clear line between good superhero movies (X-men, The Incredibles, Iron Man) and bad superhero movies (Superman III, The Punisher, Batman and Robin, Daredevil, Fantastic Four). The former do a good job of developing the heroes as characters first, and superheroes second. Iron Man was, I think, a bit light on the pathos side--I'm guessing they'll save that for the sequel, which will probably involve Tony Stark battling alcoholism (with possibly interesting implications for his super-heroics). Bad superhero movies are more about blowing stuff up, which really does little for me.

There were, however, a couple things that bothered me about Iron Man. I know, I'm supposed to suspend my disbelief in a film like this (I mean, the guy can apparently fly without any sort of chemical propulsion source--no rockets, no jets, just little white lights), but these things still irk me (they did not bother my fellow viewers):
  • Why does no one in films use an ordinary-looking operating system? (VERY MINOR SPOILERS) Pepper Pots spends a bit of time copying files to a flash drive after breaking into a computer. When she logs in the login screen looks nothing like a Windows or MacOS login, or any other login screen I've ever seen in the real world. And of course, when she "breaks in", the words "Security breached" flash up on the screen in an alarming red box--and then the computer lets her go about her business. She then browses through files in a way that is only possible in movies, and copies files to the flash drive without dragging or using any shortcut keys (as far as I could tell). Almost everyone has seen a computer nowadays. Would it be so hard to just use an actual computer operating system in a movie? It's almost as bad as that terrible Sandra Bullock film, The Net.
  • (more VERY MINOR SPOILERS) Why does Tony Stark have a witty AI running his workshop? Are its retorts and ripostes canned and preprogrammed, or are they off-the-cuff? If the latter, then this thing must be pretty smart. Why doesn't Tony just let the A.I. fly the suit around, so that he can stay safe at home? The movie takes place in the present or the very near future; why is he the only guy with this clever A.I.? In fact, A.I.s that act like humans in approximately contemporaneous films and TV shows--K.I.T.T., for example--bother me a great deal. On the other hand, K.I.T.T. is the only other example that comes to mind, so maybe I'm being stupid. I'll give 2001: A Space Odyssey a bit of slack because it was written before the difficulties programming such an intelligent A.I. were clear (and because it went haywire, perhaps suggesting it wouldn't be easy after all). I'll go further--A.I.s in general bother me in films, because they are so clearly capable of doing so many things that would free up human labor, but they aren't actually used. Oh, and Tony Stark also has A.I.s inhabiting various robotic arms in his workshop that are smart enough to pick out his actual instructions from his constant belittling of the robots.
  • (BIG SPOILERS) (No, seriously these are BIG SPOILERS): It turns out that Tony Stark's weapons have gotten into the hands of terrorists, and are used against American troops. This changes Stark's life. I find it difficult to believe that this had never before come to his attention. If insurgents in Iraq or Afghanistan were using advanced U.S. weaponry against U.S. troops, we (Tony Stark included) would likely hear about it. They could have fixed this by stating in the film that the terrorists had just acquired the weapons, but had not had a chance to use them yet (thus explaining why Tony Stark wouldn't know)--but that still doesn't make sense from the villain's point of view. The villain would have to know that the U.S. government would wonder how the terrorists got their hands on Stark weaponry.
  • (inconsequential spoilers) A reporter persistently suggests that Tony Stark is a monster because his company makes weapons, and these weapons are then used to kill people. It seems to me that this is a weak argument. It would make more sense to criticize him for selling them to particular people, or perhaps for encouraging the U.S. to engage in a foreign policy path that requires the use of lots of powerful weapons (there's no indication in the film that he ever lobbied for a militaristic foreign policy--I'm just saying it would have made more sense if the suggestion was made). I was hoping that the film would maybe venture in to slightly political territory and comment on the U.S.'s actions in Afghanistan, but I suppose that would be out of place in this sort of film.
  • (BIG SPOILERS) There is a bald terrorist character who works with the other main villain in the film. At one point, the other villain meets up with the bald terrorist, ostensibly to make a deal. In fact the other villain simply takes what he wants and kills all the terrorist's men. Here's the puzzling part: He leaves the terrorist temporarily paralyzed, but otherwise unharmed. Why? Why insult him and kill all his men, and then leave him alive? That's the sort of stupid evil supervillain thing that I thought had died with the goofy old Bond films. It's not like the newly understaffed, insulted terrorist is going to be eager to do more business (i.e., buy more weapons) with the big villain in the future. I'm guessing that the reason he was left alive was so that he would be available for the sequel, but that doesn't mean it makes any sense inside the story.
But really, I'm just being picky and obnoxious. While I'm being obnoxious, I might as well rant on about a few more things:
  • Battlestar Galactica hasn't been great since the first season, since it became clear that the cylons aren't really all that interesting, they don't really have a plan, and the writers became more interested in making the show a soap opera than telling a story about difficult choices and moral dilemmas in a lifeboat situation. I guess they could also have asked interesting questions about what it means to be human, or whether it matters whether or not there is one god or many gods, and why, but they don't really seem interested any of those questions. (Season three SPOILERS ahead) Instead they're interested in announcing that well-established characters are cylons by playing Bob Dylan songs in their heads. That isn't cool or edgy or stylish. It's just stupid.
  • Lost started to meander in season 2, but it is back to being the best fiction on television. Yes, this show has some soap-opera tendencies of its own, but for reasons I cannot explain they don't usually bother me at all (the characters that did bother or bore me seem to have been killed off for the most part). Maybe it's because the character stories are buried in such a fascinating puzzle. It's interesting that Lost has managed to bring characters into conflict with each other in a way that makes me root for both sides--I can see why Jack and Locke, for example, go in different directions, and root for both of them. Amazingly I even wonder if there might be reason to sympathize with the evil plotter Benjamin Linus. By contrast, Battlestar Galactica has persuaded me to despise almost every character on the show, even when I initially liked many of them.
  • I think a Captain America movie could be really great, but only if it weren't a rah-rah patriotism movie. I'd rather see a film about a WWII-era supersoldier who is thawed out and finds the modern world--and modern foreign policy--confusing and disturbing. I guess it would be hard to actually call him "Captain America" and have him taken seriously. Perhaps it could be an ironic nickname.
  • South Park continues to be relentlessly relevant and hilarious.
  • Nothing else on TV seems to get my attention. I'll occasionally watch The Daily Show when I'm in Nashville, but aside from Lost I don't really make an effort to watch anything. I'll watch South Park if I can remember, and occasionally I watch Battlestar Galactica to see if things have gotten better (they could still save the show if the ending is particularly clever and explains all the apparently stupid decisions made so far--but I think it's unlikely). I've never seen an episode of 24; I should probably get the first season on Netflix sometime.
One more thing I forgot to add. Iron Man was digitally projected, and we ended up sitting in the front row. I could actually see pixels in certain situations. That was kind of neat.

30 minutes well-spent

If you're looking for some great economics to read, but don't want to go out and buy a book, have a look at this. Or maybe you've got an urge for some fiction. Again, read this. I think it's brilliant. It is The Cambist and Lord Iron, by Daniel Abraham, from a collection of stories called Logorrhea. Apparently the authors are given unusual words and asked to work them into stories. This one manages to work in some economics, to boot. It's about a currency-exchange clerk and his encounters with the dangerous Lord Iron. Share it with your friends; someone is likely to get a kick out of it. Spotted on Brad Delong's Semi-Daily Journal.