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Using Beer to Determine the Value of Mustard

Paul is hosting George and his dog, Alan, for lunch at his apartment.

The available lunch fixings are as follows:

2 plain hot dogs with buns
1 raw hot dog for Alan
1 empty dog's dish for Alan
1 sealed foil pak of mustard, enough for only 1 hot dog
1 16 oz unopened can of beer
1 empty 16 oz plastic cup

Assumptions : As soon as Paul has poured a measured amount of beer from the can into the plastic cup, the rest of the beer in the can will be poured into the dog dish. If there is no beer remaining in the can, the dog dish will be filled with water from the tap. Neither the cup nor the dog dish can be shared.

Paul has no idea what George's food preferences are. Alan's preferences are beyond the scope of this problem.

All of Paul's actions shall be assumed to be in his own short term self interest.

Plot :

Paul sets two places at the table. Each place has a hot dog with bun.

One of the places has the foil pak of mustard and the other has the plastic cup containing beer.

George is allowed to choose where to sit.

Question #1 : What have we learned about George's preferences?

Question #2 : What do we know about the quantity of beer in the cup?

Question #3 : What do we know about the economic value of the mustard pak?

Question #4 : George has been snooping in Paul's kitchen cabinets and, just before Paul pours the remaining beer into Alan's dish, George finds a second 16 oz plastic cup. How does this change the process above and what is the effect on the answer to question #3?

Regards, Don

end


What's the economic meaning of beer?

John is hosting George for lunch at his apartment.

The available lunch fixings are as follows:

2 plain hot dogs with buns
1 sealed foil pak of mustard, enough for only 1 hot dog
1 small, leaky keg of beer
1 empty 9 ounce plastic cup

Assumptions : As soon as John has drawn beer from the keg to the plastic cup, the rest of the beer in the keg will leak uselessly away down the drain. The cup cannot be shared.

John has no idea what George's food preferences are.

John and George have always been very competitive, and neither would willingly allow the other to get the better of any situation.

John sets two places at the table. Each place has a hot dog with bun.

One of the places has the foil pak of mustard and the other has the plastic cup of beer.

George is allowed to choose where to sit.

What economic fact(s) can be deduced from the outcome of this process? [ed]


Indirect Polling

You have a sample population of 10,000 people whose opinion on a global warming prevention policy you wish to ascertain. However, you are not permitted to ask any question which has a direct reference to global warming in any way.

What question can you ask which will have the highest probability of a correct inference from its answer?

For example, a 'yes' answer to the question below seems likely to produce a greater than 75% correct inference of support for the GW prevention policy.

Question : Do you support a legal minimum wage?

Regards, Don


Will Global Warming Supporters Sell You Insurance Against Iceland Volcanic Global Cooling?

Are we going to need an ice cube tax? (Probably not, as producing ice cubes likely has a net heating effect.)

Regards, Don


Crystal Ball

---------------------------------

By 2050, how many European countries will be ruled by military dictatorships following the breakup of the EU?

Regards, Don


Global Warning is Likely to Starve 5 Billion People Worldwide Over 200 Years, No Matter the Temperature Change

This would be a tragedy greater than the direct effects of all of the tyrants in world history combined. Agree or disagree?

Regards, Don


Must Read -- The American Story by Garet Garrett

Available from the Mises Institute in either pdf or printed paperback -

http://mises.org/store/American-Story-The-P617.aspx

"He was a defender of free enterprise who adored the magnificence of the American genius for progress.

He was a champion of business who believed in profiting the old fashioned way.

He was a libertarian who deplored the rise of big government.

He was a constitutionalist who was aghast at how presidents and congresses shredded the document in times of economic crisis and war.

He was the last of the great old-time liberals who opposed FDR's welfare-warfare state.

Above all else, he was a brilliant student of the American experience who could tell a story like no one else of his generation.

Garet Garrett's last book was his own retelling of American history, with a special focus on the technologies and people behind them that transformed life for average people, along with a relentless and truth-telling story about the rise of the state.

These had been a theme of all of his work, from his novels of the 1920s to his case against the New Deal in the 1930s. His final work tells the story of the American people as its never been told, from an early experiment in freedom, and the fight against the powers in Washington that sought to suppress that freedom, all the way through the beginnings of a preventable Cold War.

The images that the author presses on the mind in The American Story--a complete biography of a country--are vivid and telling, the product of a lifetime of study and the wisdom of age.

The Wall Street Journal called this book "probably the most brilliant long historical essay on America that has ever been written."

A book this great should have been read by all high school students in this country, but instead it died an early death. The political culture of the time found it inadmissible with too many unthinkable thoughts. Garrett struck the budding conservative movement as too erudite and too principled to fit in with the organizing plan of new times. He was left to write for the ages.

Thus does the Mises Institute release this masterpiece more than 50 years after it quickly came and went. It is the sort of book that changes the way we think about our own history, and to celebrate the wisdom of a great American essayist and novelist.

He begins in Colonial times to illustrate the culture that shaped the country: "If the Americans were going to grapple this continent to themselves, do it with their bare hands, and do it before a land-hungry world could see too much, they would have to be in a hurry.

"Yet after they had performed this incredible feat, after they had bound their continent together with bands of steel and it was entirely safe, still their feud with time went on. When they were fifty million, then one hundred million, and already the richest people in the world, still their minds were obsessed with time saving inventions of method, device and machine, as if they knew how much more there was to do and were fearful that they could not get it done in time."

On the American industrial genius: This is what made American industry supreme in all the later phenomena of mass production. Other people had machines that were just as good, and had them first, other people knew the methods too, and were welcome to come and look, but they worked in another dimension of time. Here the machine was not to save labor; it was to save time.

On how the U.S. triumphant over British manufacturing: Thus it was that at the onset of a Scythian struggle for economic supremacy American industry began with all young and new machines and a ruthless way of killing them as fast as they became obsolete-and this against the older machines of Europe and against the reluctance of the European industrialist to destroy capital which until then had been very profitable. The old mare was still what she used to be; the trouble was that better mares were getting born. Moreover, American industry had no complacency of laurels, no traditions, no habits. It was rash and experimental; it could embrace a new method with amazing ease, and no one to say, "But we have always done it this way."

On agricultural technology: Now the wooden plow, the hoe, the scythe and cradle were gone; and that was only the beginning. Came the harvester-a machine that cut the grain like the reaper but at the same time gathered it up in sheaves and tied a string around the sheave with its own steel fingers. "Behind the harvester lay the sheaves, in rows as neat as dominoes, needing only to be picked up. And• then the threshing machine: first a stationary one to which the sheaves were brought from the field by wagons, the grain passing back to be sacked and the straw piling up in mountains; and then one that by its own power moved over the standing wheat, reaping it into its maw with one stroke, threshing it by internal commotion, spilling the straw back to the ground as it passed, sending the winnowed grain through a pipe to a tank tender.

On industrial transformation: One generation of Americans, with their fierce jealousy for freedom of enterprise and their philosophy of laissez faire, had created here the most powerful industrial nation on earth. It was not what they possessed in land and treasure and knowledge; other people had as much of these or more. It was what they did with what they had; and they were bound to go on until they should have in their hands, of their own making, half the industrial power of the whole world and no rational idea of what to do with it.

On World War I: In World War I the Americans exerted their strength to make the world safe for democracy. That was an unattainable object because, first, democracy was something nobody could define, and, secondly, half the world did not want it. However you define it, the life of democracy in the world was much less safe afterward than before.

The Great Depression: During the Great Depression the imperious tradition of limited government was sacrificed, and the ground principles of free, competitive enterprise were compromised beyond redemption.

Gold confiscation: The government took it and buried it at Fort Knox. That was confiscation, and bad enough; but there was one more trick. The government said: "When the Federal Reserve Banks took possession of this gold it was worth only $26.67 an ounce. Now it is: worth $35 an ounce. The difference is profit and it belongs to the United States Treasury." It was not profit; it was bookkeeping. Nevertheless, the Treasury set it up in its books as profit, converted it into paper dollars, and spent the money. It was a sum of nearly $2 billion. To reduce the gold dollar to a piece of irredeemable piece of paper took fourteen months. In the process the President got physical possession of the public purse.

On the AAA: It was already the middle of Spring; too late to stop planting and breeding. The alternative was to destroy growing crops. The AAA paid farmers to plow down as much as one-fourth of their cotton, wheat, corn and tobacco and to slaughter millions of little pigs before they could grow into pork-provided they would sign up to take orders from the government next year.

On the NRA's Blue Eagle: "Its significance was that of the brass serpent held aloft by Moses. If you looked upon it and believed you were saved from the fiery serpents sent by God to scourge a willful people. The fiery serpents in this case were little bands of NRA workers, with NRA pencils and paper in their hands, going to and fro in the streets and through public places, aggressively demanding that people stop in their tracks and sign a pledge to boycott any place of business that did not display the Blue Eagle. That was Johnson at his worst and best.

On Pearl Harbor: An attack was expected. It was the wished-for solution. That the Japanese would cross the Pacific to commit their first overt act at Pearl Harbor was unexpected. And the loss of a mighty fleet and more than three thousand lives in one hour was perhaps much more than the war party would have been willing to pay for a declaration of war by Congress.

On World War II: In World War II they exerted their strength again to put down aggression in the world and to confer upon mankind the four freedoms, especially freedom from want and freedom from fear. What was the result? They put down one aggressor and raised up a worse one, the old spectre of famine returned and fear became the controlling emotion of the whole world, even the fear that civilization might perish.

On Yalta: And still the story of Yalta cannot be understood without reference again to the strange infatuation of the Roosevelt regime for Russia. It was as if Mr. Roosevelt had taken it upon himself personally to overcome the Russian Dictator's distrust of the Western World and convert him to the cause of freedom. To do this he thought it necessary to placate Stalin, to give him, or seem to give him, everything he wanted, thereby to engage him in bonds of gratitude and win his collaboration.

On Korea: It was an absurd war. American power became imprisoned in it. The Americans could not afford to lose it; neither could they afford to win it. If they lost it, or abandoned it, they would lose face forever in Asia. On the other hand, to win it they might have had to conquer China, which was an appalling task to contemplate, besides at the same time alienating their United Nations allies, most of whom, and especially Great Britain and India, were for confining the war to Korea and coming to terms ultimately with Communist China."

413 page, paperback, 2009

Obama and the 2008 economy described before he was born.

Regards, Don


The US System of Justice

If the US System of Justice were imposed on the country by a foreign power, it should be viewed as an act of war.

First reform -

No prosecutor who serves more than 60 days shall ever be eligible for further public office, whether elected or appointed. Nor shall he be allowed to be involved in politics in any way whatsoever, either during or after his term of service.

Regards, Don


Fedex Plans to Raise Rates Next Year To Counteract Falling Profits

From Business Pundit:

Does this headline make any more sense than a headline:

Fedex Plans to Lower Rates Next Year To Counteract Rising Profits?

or

Fedex Management to run its company hoping for a gift of golden parachutes from shareholders?


CO2 and Climate Change

CO2 and Climate Change : Proof that intelligence is an evolutionary dead end.

Puzzle : From whom or what country does the following blog quote come?

The advocates of carbon regulation suffer from the same megalomaniac feelings as every dictator who has ever wanted to rule the world. These little green men think that they have the right to steal two trillion dollars a year - a bigger number than Adolf Hitler and Joseph Stalin could ever imagine - to realize their crazy plans and please their little green gods. Most of them are parasites who haven't contributed 100,000 dollars worth of products to [ed] mankind, but they have no moral problems with stealing trillions more.

Regards, Don


Economic Growth vs Education

Latin America, Economic Growth and Education

"Conclusion
The dismal level of cognitive skills reached by Latin American countries can account for their poor growth performance since 1960. Student achievement test performance explains inter- and intra-regional growth differences. If countries in Latin America (and, by implication, Sub-Saharan Africa) want to improve their growth performance in the future, they need a “Millennium Learning Goal” (Filmer, Hasan, and Pritchett 2006), rather than mere quantitative targets of educational attainment. It is not simply going to school but only actual learning that counts for economic growth."

The idea that national economic growth is primarily limited by education, whether its quantity or its quality, is absurd.

While I have no knowledge of Latin America, the first place that I would look is for structural and cultural barriers to the formation of new private businesses.

The real question, to my mind, is which of the following economic changes would lead to a better economy?

1. Replace 25% of the plumbers with academic PhD level economists.

or

2. Replace 25% of the academic PhD level economists with plumbers.

Regards, Don


Blogrolling.com

Is there any reason why I shouldn't wish a slow, painful and agonizing death to everyone involved with blogrolling.com?

I don't know anything about it except that it appears on my screen without permission and f*cks up several times a month and randomly blocks access to real blogs.

Regards, Don


More minimum wage insanity

From Free Exchange:

MICHIGAN has the highest unemployment rate of any American state, at 15.2%. State leaders are looking for a solution. Here's what they've come up with:


A $10 minimum wage in Michigan is the centerpiece of a number of populist proposals unveiled Wednesday by the Democratic Party, which hopes to get some of the initiatives on next year's ballot...

Increasing the state's minimum wage from $7.40 an hour to $10 an hour would give Michigan the highest standard in the nation. Washington state has the highest rate at $8.55 an hour.

The initiative also would remove exceptions that allow employers to pay less than the minimum wage to some workers, such as restaurant wait staff.

Labor unions and Democrats were pushing a ballot plan to raise the minimum wage in 2006, but the Legislature approved an increase before it could go to voters. That measure gradually raised the minimum wage from $5.15 an hour to $7.40 an hour, which went into effect July 1, 2008.

Union officials see the minimum wage as a quality of life issue for hourly workers, but business groups say many employers, especially small businesses, can't afford another increase.

Unbelievable. The state is bleeding union jobs, so it's not clear that an increase in the minimum wage is going to do union workers much good anyway, but it will be an enormous blow to the non-union unemployed looking for any service industry job they can get. Pity the state's immobile poor.


A Simple Proposal

Proposed :

No public employee, whether elected, appointed, or hired, whether union or non-union, whether military or civilian, whether local, state or federal, at any level from President on down, shall be entitled to a defined benefit pension beyond social security, as modified as necessary for soundness.

Rather, they will be accorded various choices of portable contributary pension plans, which may include either present or future tax advantages and may include limited matching of contributions.

Given history, no rational private sector employee would/should choose a defined benefit pension plan and tie his future to a company that almost certainly will not exist when he retires. Note that a company that promises a defined benefit plan is even more likely to disappear. It will soon become clear that public entities below the federal level, not able to print money, will not be able to fulfill their promises either. At the federal level, the problems will only be delayed.

Regards, Don