Marginal Revolutions is currently one of the most popular economics blogs. It is written by Tyler Cowen and Alex Tabarrok, both of whom are professors at George Mason University. In addition to a daily roundup of interesting links, the blog features some of the best economics debates on the web.
Mr. Sarkozy, 63, was taken into custody in Nanterre, northwest of Paris, after answering a police summons, according to a French judicial official who spoke on the condition of anonymity, in line with department policy…
The suspicions behind this case first emerged in 2012, when the investigative news website Mediapart published a report suggesting that Mr. Sarkozy’s 2007 campaign had received up to 50 million euros, or nearly $62 million at current exchange rates, from the regime of Colonel Qaddafi, the longtime Libyan strongman who was killed in 2011. Such support would have violated France’s strict campaign finance laws, which cap spending and prohibit foreign funding.
A sheriff in Alabama bought a house using money that was budgeted to feed jail inmates. When I saw this headlined a week ago I assumed that this was a run-of-the-mill story about white collar fraud and I ignored it. Yesterday, prodded by new developments, I investigated further. The truth is much worse than I had imagined. What the sheriff did was perfectly legal.
Alabama has a Depression-era law that allows sheriffs to “keep and retain” unspent money from jail food-provision accounts. Sheriffs across the state take excess money as personal income — and, in the event of a shortfall, are personally liable for covering the gap.
Etowah County Sheriff Todd Entrekin told the News that he follows that practice of taking extra money from the fund, saying, “The law says it’s a personal account and that’s the way I’ve always done it.”
Sheriffs across the state do the same thing and have for decades. But the scale of the practice is not clear: “It is presently unknown how much money sheriffs across the state have taken because most do not report it as income on state financial disclosure forms,” the Southern Center for Human Rights wrote in January.
And if that isn’t bonkers enough. It gets worse. The primary source for the story, written by journalist Connor Sheets, was Sheriff Entrekin’s lawnmower, Matt Qualls. Qualls has since been arrested and is now in a jail overseen by Sheriff Entrekin.
Sheets’ initial story was published on Feb. 18. On Feb. 22, Qualls was arrested and charged with drug trafficking after an anonymous call complained of the smell of marijuana from an apartment.
Qualls, who had never been arrested before, faces six charges and is being held on a $55,000 bond, Sheets reports. He is detained in a jail that Entrekin oversees.
…The sheriff’s office denies involvement in Qualls’ case, noting that the landscaper was not arrested or charged by the sheriff’s office. The extra charges were added by the Drug Enforcement Unit, which consist of agents drawn from the sheriff’s department, the FBI and other law enforcement agencies.
Addendum: You may be reminded of the story that Tyler and I use to open our principles of economics textbook. Ship captains in the 18th century were paid to ship convicts to Australia according to a very similar procedure as used today (!!!) to fund prisoner food in Alabama–and the results were equally predictable.
The 2018 Public Choice Outreach Conference, a crash course in public choice for students planning careers in academia, journalism, law, or public policy will held June 9-10 in Arlington VA. Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy political science, psychology, public administration, religious studies, and sociology have attended past conferences. Speakers include Robin Hanson, Bryan Caplan, Shruti Rajagopolan and many others.
You can find an application and more information here. If you are a professor please invite your students to apply.
Here are some quotes from past attendees of the Outreach Conference:
It was so useful to hear such varied and intriguing aspects of public choice thought. The other members of the conference were fantastic to meet and now I’m sure we all have so many new paper ideas and updated perspectives on our original interests, thank you!
Clara Jace, Creighton University
I found the conference insightful into many different topics. What I think was most unique about the conference was the diversity of ideas, theorems and most importantly, ideas for solutions to these prevalent problems. I think my favorite part of the econ conferences is how quick presenters are to say “I don’t know” to questions and proceed to give the analytical reasoning for both sides of the argument instead of giving a BS answer that may or may not be true. Overall, I have loved this conference.
Jalee Blackwell, West Texas A & M, School of Business
Wow, this conference was absolutely exceptional. It provided some of the most interesting and thought-provoking Econ lectures and conversations I have ever had the privilege of engaging in. The opportunity to have one on one discussions with some of the world’s leading minds in these fields was truly an eye opening, educational, and inspiring experience that I won’t soon forget.
I am agnostic on this question, but Jay L. Zagorsky presents the case for no:
First of all, the Mint creates coins in response to demand, and demand for small-denomination coins is soaring. Over the past decade, the Mint roughly doubled the number of pennies and nickels it shipped. Both coins enjoy widespread popular support in opinion polls as well.
It’s true that it costs more to mint these two coins than they are worth. In 2017, it cost the U.S. Mint 1.8 cents to make each penny and 6.6 cents for each nickel. Overall, however, the Mint is a profit machine. In 2017, it earned almost $400 million in profits producing circulating coins. For every dollar’s worth of coins it shipped out, the Mint made 45 cents. That is a profit margin many business owners dream about.
So, think of pennies and nickels as the Mint’s loss leader. They help create demand for more profitable coins in the cash economy. Eliminating pennies and nickels could make people think coins overall aren’t useful. And if we stop using all coins, the Mint will lose $400 million of profit a year.
…Stores and other businesses bothered by small-denomination coins can set prices so the final cost ends up in round numbers that eliminate using pennies or nickels. Food trucks and restaurants have used this kind of flat pricing to speed up checking out.
At the WSJ link, Henry Aaron argues the other side of the issue. I should note that I have acted privately to abolish pennies (and occasionally nickels) from my own life. Think of it as unilateral privatization, quite literally an idea for the trash and gutter.
It seems far more likely that Facebook will be directly regulated than Google; arguably this is already the case in Europe with the GDPR. What is worth noting, though, is that regulations like the GDPR entrench incumbents: protecting users from Facebook will, in all likelihood, lock in Facebook’s competitive position.
This episode is a perfect example: an unintended casualty of this weekend’s firestorm is the idea of data portability: I have argued that social networks like Facebook should make it trivial to export your network; it seems far more likely that most social networks will respond to this Cambridge Analytica scandal by locking down data even further. That may be good for privacy, but it’s not so good for competition. Everything is a trade-off.
White boys who grow up rich are likely to remain that way. Black boys raised at the top, however, are more likely to become poor than to stay wealthy in their own adult households…
Gaps persisted even when black and white boys grew up in families with the same income, similar family structures, similar education levels and even similar levels of accumulated wealth.
This is pathbreaking work by Raj Chetty, Nathaniel Hendren, Maggie R. Jones, and Sonya R. Porter [full paper here].
The study, based on anonymous earnings and demographic data for virtually all Americans now in their late 30s, debunks a number of other widely held hypotheses about income inequality. Gaps persisted even when black and white boys grew up in families with the same income, similar family structures, similar education levels and even similar levels of accumulated wealth.
The disparities that remain also can’t be explained by differences in cognitive ability, an argument made by people who cite racial gaps in test scores that appear for both black boys and girls. If such inherent differences existed by race, “you’ve got to explain to me why these putative ability differences aren’t handicapping women,” said David Grusky, a Stanford sociologist who has reviewed the research.
A more likely possibility, the authors suggest, is that test scores don’t accurately measure the abilities of black children in the first place.
If this inequality can’t be explained by individual or household traits, much of what matters probably lies outside the home — in surrounding neighborhoods, in the economy and in a society that views black boys differently from white boys, and even from black girls.
“One of the most popular liberal post-racial ideas is the idea that the fundamental problem is class and not race, and clearly this study explodes that idea”…
The NYT piece is by Emily Badger, Claire Cain Miller, Adam Pearce, and Kevin Quealy. And from the paper itself:
Conditional on parent income, the black-white income gap is driven entirely by large differences in wages and employment rates between black and white men; there are no such differences between black and white women.
Since coming to power in the country of 55m on the east coast of Africa in 2015, Mr Magufuli, nicknamed “the bulldozer” from his time as roads minister, has bashed foreign-owned businesses with impossible tax demands, ordered pregnant girls to be kicked out of school, shut down newspapers and locked up “immoral” musicians who criticise him. A journalist and opposition party members have disappeared, political rallies have been banned and mutilated bodies have washed up on the shores of Coco Beach in Dar es Salaam, the commercial capital. Mr Magufuli is fast transforming Tanzania from a flawed democracy into one of Africa’s more brutal dictatorships. It is a lesson in how easily weak institutions can be hijacked and how quickly democratic progress can be undone.
…The main lesson of Tanzania is that constitutions which concentrate power in the presidency can quickly be subverted.