Word of the Day

mollify \MOL-uh-fy\, transitive verb:

1. To pacify; to soothe or calm in temper or disposition.
2. To reduce in intensity; to temper.
3. To soften; to reduce the rigidity of.


One hundred seventeen and a half pesos! Did you think you could mollify me with that amount, Philip V?
-- Ana Teresa Torres, Doña Inés vs. Oblivion

Rutger - BCS Discussion

Here is an interesting discussion from Pro-football-reference concerning the controversy which will ensure if Rutgers finishes out the season undefeated, but does is not selected to play in the championship game.

If Rutgers is undefeated and does not play in the title game, will that be because of Big East bias, or will it be because of preseason poll bias?

Every reputable ranking system I’ve seen (here are a few: I, II, III) say that the Big East is stronger than the Big XII and the ACC. So the question is, if Missouri or Texas A&M or Wake Forest had gone undefeated this year, would they be getting the same treatment Rutgers is now getting? If yes, then it’s preseason bias (and/or reputation bias). If no, then it’s Big East bias.

I don’t have any evidence to back this up, but I happen to think that it’s yes. The problem isn’t that people are undervaluing the Big East. It’s that people, even at the end of the season, haven’t phased their preseason expectations out of their internal ranking algorithms.

RIP Milton Friedman

Milton Friedman, the pro-capitalism and free market economic genius, who coined the phrase, "There is no such thing as a free lunch" died today. He was 94 years old. Here is a comprehensive article chronicling his life, and if you are even more interested, here you can find his memoirs, which he co-authored with his life. Friedman really was one of the last, great economists, and has been one of my personal favorites throughout my studies.

Starbucks Caffeine Inhaler

This delivers a grande sized burst of caffine with each blast while making your breath minty fresh.




Fortunately, I doubt this is real. However, for all you Starbucks lovers, you can read, here, about how Starbucks is going to devour your pocketbook, one $4.99 latte at a time.

Here is an excerpt:
What's more, Starbucks already has a reputation for having the most expensive coffee in the marketplace. When I left Moneybox's New York headquarters to conduct research at the closest Starbucks (a block away), I passed a half-dozen other coffee vendors. There's the guy with the cart who sells the little Greek diner cups for 50 cents; the deli with the scalding 75-cent generic joe and the thin paper cup; the convenience store with $1.00 faux gourmet stuff; and Cosi, where a latte costs $3.59. Only after running this gantlet could I enter Starbucks, where a java chip Frappuccino runs $4.75.

Global Forces

Per Michael Mandel with BusinessWeek:

Sometime next year—perhaps around Christmas 2007, if current trends continue—the U.S. will hit a milestone. For the first time in recent memory, the cost of imported goods and services will exceed federal revenues. In other words, Americans will soon pay more to foreigners than they do to their national government.

We're almost there now. Imports cost us about $2.2 trillion a year; the federal government collects $2.4 trillion in revenues. Why is that important? Because for the past 70 years, Washington has been the 800-pound gorilla, more powerful by far than any other force in the U.S. economy. That's not true anymore. The federal government remains plenty influential, but the global economy is more so.

This will come as a rude shock to Representative Nancy Pelosi (D-Calif.), the presumptive Speaker of the House, Charles B. Rangel (D-N.Y.), the likely chairman of the House Ways & Means Committee, and other newly enfranchised leaders in the Democratic Party. Sure, they're likely to have the power to pass legislation, including boosting the minimum wage. But such a measure, even if President George W. Bush signed it, would help only a small fraction of the workforce. It would do almost nothing to ameliorate the weak wage growth that has plagued most Americans, including college graduates, in recent years. The broad-based drop in incomes is being driven more by the rise of China and India and the intensification of global competition. And there is little Democrats can do to reverse these trends.

I am as big a fan of free trade as anyone, yet it does frighten me the way those guys in Bangalore, India, and China are eating into the U.S. Economy. My take on it, is that it will force Americans to get off their fats and start learning. While our labor costs cannot compete with India, we can at least make a push at educating ourselves to the degree of those phenomenal Indian technical institutes.

When it comes down to it, Americans lack drive. The Indians are hungry, and will do what it takes to work there way into a decent lifestyle, while Americans, in general, are fat, lazy, and complacent to watch Grey's Anatomy and Lost every night. My message is this: Wake up everyone, or we will all find ourselves being eaten for lunch by the rest of the hungry world.

Wal-Mart Economics

This is per Arnold Kling over at EconLog:

At the MIT economics alumni event this morning, Jerry Hausman spoke about his research on Wal-Mart. He says that Wal-Mart lowers prices to consumers primarily by bargaining down the prices charged by suppliers, such as Procter and Gamble. It also uses cost-saving logistics. Lower labor costs may contribute to its low prices, but not as much as the other factors.

Hausman argues that driving down prices of suppliers is a benefit, because prices are being driven closer to marginal cost. In welfare-economics terms, you can think of Wal-Mart as a substitute for a regulator who would try to improve efficiency by forcing imperfectly competitive producers to move down the demand curve.

The magnitude of the benefit is enormous. Hausman looked at food, and for that category alone Wal-Mart increases consumer welfare by 25 percent (I'm a bit worried that the theory behind his calculations holds only for much smaller differences, but I don't have an alternative.) Since food is about 12 percent of GDP, multiplying .25 by .12 gives a benefit of .03, or 3 percent of GDP from Wal-Mart.

UK Defeats UGA 24-20!

and



down it goes



Read all about it here.

Word of the Day

prevaricate \prih-VAIR-uh-kayt\, intransitive verb:
To depart from or evade the truth; to speak with equivocation.

Journalism has a similar obligation, particularly with men and women suddenly transferred to places of great power, who are often led to exaggerate and prevaricate, all in the name of a supposedly greater good.
-- Stephen R. Graubard, "Presidents: The Power and the Mediocrity", New York Times, January 15, 1989