Stephen Dubner Acts Like a Jerk

In a recent blog posting on the popular "Freakonomics" website (which I say for fear Dubner might humiliate me on his blog too), Stephen Dubner decides to call out Karl Smith. Beyond the fact that its slighly childish and egotistical to spend an entire post DEFENDING your blog popularity - I personally felt Mr. Dubner violated an unspoken blogging ethic - don't pick on the little people. Here is my response to Mr. Dubner:

"I'm gonna go ahead and assume that Dubner doesn't follow econ blogs enough to know that Karl Smith is quite active in the econ blog community (from what I've seen) and is a regular and thoughtful contributor to Mankiw's site, as well as hosting his own blog.

In any case I thought your post was more attacking than necessary - and I think you assume (perhaps falsely) that Karl Smith meant his statement to be falacious. Perhaps he just made a mistake? Oh wait - that NEVER happens at the NY Times! Sure....

Beyond that, you have a modicum of fame (rightfully so, "Freakonomics" was a well-written book), but with that fame comes the responsibility that you don't pick on lesser known people unless they do or say something really disparaging. Otherwise, you come off as a jerk (which you did to me). Implying that Karl is attempting to spread conspiracy theories or that he states "mistruths" (or, "Lie" to us non-journalists), is just wrong of you.

PS - note that it doesn't work the other way around - which is why I can call you out all I want, Mr. Famous Guy. "

UPDATE:
After I posted my response I realized that Karl Smith had already noticed Dubner's post and responded to defend himself:

"Woah . . .
I didn’t know I was starting all of that. Yes, my real name is Karl Smith and you may remember that Steven linked to me as a “Strong Defender” of his work.
At the time I noticed that I also got a link from a Spanish blog that simply repeated the post and what looked liked others from freakonomics. It may not have even been Spanish by the way, that was just what it seemed at the moment. I didn’t spend anytime there.
I attempted to qualify my statement with the term “believe” but perhaps that was not strong enough. In no way was I attempting to start a conspiracy theory against the blog. I think its a great blog and I used the book as the only text book in my Intro to Economics class despite my regular appearance at Greg’s site.
If anyone has been “dissing” your blog based on my comment then I apologize.
— Posted by Karl Smith"

---Good for you Karl. Though I think you were far too easy on him.....

Katrina

For all the solemn things we learned in the Katrina aftermath, we also learned a less profound thing - that supply and demand is a powerful force. Everyone talked about escalating gas prices post-Katrina throughout the US. But almost no one mentioned the fact that, in New Orleans, gas prices did NOT start rising for 6 weeks or more after Katrina - largely due to the decrease in demand due to the deaths and displacement to other parts of the country:
Notice the increased New Orleans volatility as well....

SAT scores in Indiana fall!!! (by six points)

The news in my state is going crazy (2) over the fact that SAT score average fell from 1493 to 1487 for this graduating class. I'm gonna go off on a limb here and say that a drop of .4% (.00402) is likely statistically insignifcant folks.

In fact, "Wayne Camara, vice president for research and analysis at the College Board, described the declines from 2006 to 2007 as statistically insignificant."

So, yes, the fact that Indiana lags behind the nation and is not closing that gap is a big issue, but a year-to-year change of such a small magnitude is not necessarily anything special. In fact, if SAT scores consistently rose every year without fail, assuming no major policy changes from year X to year X+1, that would tend to indicate that the class in year X+1 are always somewhat smarter than the class in year X, which of course is ridiculous - that should be pretty random year-to-year.

Hence, we would expect, holding policy and other shocks constant, SAT scores to go up and down and fluctuate ever so slightly over a number of years. And as policy changes, or tastes for education increase, etc, or real income rises.... we would hope to expect a gradual rise over the long-run ... somewhat akin to economic growth with recessions and booms (though not as dramatic). But the limits to SAT scores are much greater than for economic growth.

IE, we can't expect the average to keep climbing indefinately until it gets to a perfect score - that would be a waste of resources that could be devoted to healthcare, or defense or consumer spending other than education.

UPDATED to include total SAT score as opposed to just the reading portion.

I agree - mostly

Mises.org on State Economic Development.

Since I work in economic development, I see the costs and benefits of it up-close - and I think I can see this more clearly than most having training in economics.

I agree that it isn't the greatest possible solution. I further agree that there exists a prisoner's dilemma that largely is the reason that many State's pursue economic development and incentives. What I disagree about is that I don't necessarily think there is a better solution - ie, ED is a 2nd best option given that states face the prisoner's dillemma. The only other option is the feds stepping in to make such incentives illegal. And that ain't happening anytime soon (Cuno v. Daimler Chrysler anyone?)

I don't believe providing incentives to firms is a net negative - I do think it is useful, especially in the real world of market frictions and imperfect information. Further, while I am certain that governments overestimate the number of jobs created that wouldn't have already have been created abscent the incentive, I also think there is good reason to believe incentives do create jobs - if not for the sole reason of reducing startup costs and making the transition of an expansion or new site go smoother. So, while incentives may be a bit inefficient - they are likely a useful form of reduced taxation given the nature of the constraints faced by the government.

How much to replace property taxes?

Indiana estimates that property taxes could be eliminated altogether by:

"increase the state sales tax from 6 percent to 13.2 percent
or
the state income tax from 3.4 percent to 9 percent to eliminate property taxes.

To replace property tax revenue using a 50-50 split, the state sales tax would have to be raised to 9.5 percent and the state income tax to 6 percent, Powers said."

I don't know if those numbers sound accurate or not. I have not read the legislative report (nor can I find it at the moment)

Either way, a point raised by this is that if such an increase drastically increases the disparity in terms of types of taxes levied between Indiana and neighboring States, that could really distort markets and firms' decisions, etc. Really, a Fair Tax-like proposal needs to be implemented at the national level before the incentive for States to enact similar measures can really materialize.

At most, as I've advocated in a previous post, a good mix of income and sales tax hikes combined with the elimination of property taxes (combined still with a complete reorg of local governemnt and how schools etc are funded) may (or may not) seem to be the best bet since then the disparity in terms of sales and income tax is lessened, and property taxes (deemed to be unfair) are still eliminated.

Of course...I'm still waiting for those pesky numbers...

THIS POST WILL BE UPDATED

This endless game of whack-a-mole

It's like I'm 11 again and playing whack-a-mole at a roller skating rink. When we aren't going round in circles, we are playing the game.....

This is from Whitehouse.gov - so you know it's fair and balanced ;)

"3. MYTH: The U.S. is playing “whack-a-mole” in Iraq.

• FACT: U.S. and Iraqi forces are conducting offensive operations against terrorists while simultaneously providing security in neighborhoods with joint security stations and patrols.
• FACT: General Petraeus’s counterinsurgency strategy is a population-centric one that is different from what has been done before. The concept is for U.S. troops to work with Iraqi forces and secure safe havens, then maintain that security by staying in neighborhoods and building trust with the locals.
• FACT: The primary reason for the “surge” in troops was to give U.S. and Iraqi forces the ability and flexibility to conduct such offensive operations in and outside of Baghdad without having to shift troops out of so many areas where they were needed for security. This is why commanders held off on many of them until the brigades were in place – to avoid the problems of past offensives."

And this is from the associated press - and it lists a number of statistics which OF COURSE must not be nearly as accurate as republican politicians....

How is this related to economics? Because if we continue as we are in Iraq, there won't be much of an economy left to speak of.

Union Power at its worst---est

This morning, the entire city of Indianapolis had its public transporation (bus system) shut down during the morning rush hour due to a dispute the Union has(d) with management.

Was the dispute about low wages, or poor working conditions?

No.

It was about having to wear proper badge identification on the job.

(Granted, management's action was pretty ridiculous as well... maybe I should have 'headed' this post "City Bureacracy at its worst---est")

Give me a frickin' break.

Why did I move back to Indy again???