Proud to Serve the Dismal Science

Courtesy Robert Dixon:

Carlyle puts the view that 'work' is morally good and that if a "Black man" will not voluntarily work for the wages then prevailing he should be compelled to work. He writes of those who argued that the forces of supply and demand rather than physical coercion should regulate the labour market that: "the Social Science ... which finds the secret of this Universe in supply and demand and reduces the duty of human governors to that of letting men alone ... is a dreary, desolate, and indeed quite abject and distressing one; what we might call ... the dismal science"

In short, economics became the dismal science because everyone is treated as equally important and defends the right to pursue happiness regardless of the manner in which society views them. Slaves, CEO's, and Mexican immigrants all receive equal treatment for their role in society from the economist.

Pushin' Primaries in Iowa and NH

The Associated Press review voter frustrations over the influence of New Hampshire and Iowa in the presidential primaries. The background on the issue is that these two states hold their primaries before all the other states, and candidates who perform badly often drop out before even appearing on another ballot.

Both states have been criticized as unrepresentative of the country given their size and lack of racial diversity. Iowa — population 3 million — is 95 percent white; New Hampshire — population 1.3 million — is 96 percent white. Democrats tried to inject more diversity into the process by adding early contests in Nevada and South Carolina, but Iowa and New Hampshire moved even earlier.

The system became so scrambled last year that New Hampshire Secretary of State Bill Gardner was prepared to move the primary into December to keep ahead of other states that scheduled their own early primaries and caucuses. If anything, the front-loaded calendar made Iowa and New Hampshire more important.

Put your game theory to work now: 1) Use the prisoners' dilemma to explain why a simultaneous game would lead to all states converging to a single point in time further from the general presidential election; 2) Using a sequential game, explain why the New Hampshire SOS Bill Gardner's (credible) threat to continue to move earlier may prevent this convergence outcome. For extra credit, think about the economic benefits of hosting the initial primaries that Iowa and New Hampshire have capitalized into their tax revenues and their constituents' economic profit make their threat to move earlier so credible.

Note that the latter part of the article discusses the argument that New Hampshire and Iowa more closely examine the candidates, weeding out the candidates without enough "substance." How does the median voter model undermine this service?

What's Wrong with this Argument?

Are Americans Lazy? Fortune magazine at CNN Money thinks we are. Like many of their articles it seems as of late, it is surprisingly ideological rather than factual. The argument is essentially this: U.S. workers are lazy given by increased amount of leisure time (such as sleeping, days off, hours of work per week, etc). His argument is based on a very good paper out of the Boston Fed and is not one that those authors are making. So the question is, why does increased leisure time NOT equal laziness? Hint: Leisure is a normal good. I’ll leave comments open for a few days if anyone has a suggestion, then I’ll leave the answer in a comment before closing them.

Also, you may also notice a rather misleading sentence that is carefully ambiguous in its wording:
Economists see it happening already, attributing some of the surprising flatness in Americans' real total compensation of the past few years to the presence of millions of global workers competing for jobs.

Which economists? Why real total compensation and not earnings? Interestingly, part of the reason this is misleading is part of the reason the leisure = laziness argument is wrong.

Racial Bias in the NBA

There is an interesting piece in the NYT covering a new economics article that reveals that referees (both white and black) are more likely to call a foul against players of the opposite race. Take a read when you get a chance, it is essentially contributing to the literature on peoples preferences for homogeneity (desires for similar people) and takes the standpoint that this is on the subconscious level.