I wonder if that is on a per pinch basis?  I refused to believe this is real language, from a real bill.  But Professor Bainbridge says it is — and doesn’t pull any punches in describing its drafter (or at least leading proponent) Assemblyman Ortiz in NY as an “officious pig and an ass.”   But rest assured, Assemblyman Ortiz assures the good citizens of New York that the bill is really about giving consumers more choice, and “more control over the amount of sodium they intake,” and “the option to exercise healthier diets and healthier lifestyles.”

So, here is the salt ban bill in pertinent part.   Really:

No owner or operator of a restaurant in this state shall use salt in any form in the preparation of any food for consumption by customers of such restaurant, including food prepared to be consumed on the premises of such restaurant or off of such premises…

Well, a boom in Hayek sales in the current regulatory climate was fairly predictable, but who knew that travel-friendly salt shakers would be the next big thing?

It turns out that the Girl Scouts price discriminate, i.e. they charge different prices for the same product in different parts of the country (HT: Knowledge Problem).   Rumor has it that demand for Thin Mints varies by region.  While the Girl Scouts concede that the introduction of the price discrimination scheme results, when coupled with  Girl Scout marketing efforts,  is tantamount to the evading pricing constraints imposed by current demand conditions.  No word on whether the Girl Scouts have hired antitrust counsel in light of the Commission’s pushing of this definition of actionable antitrust conduct in N-Data and Ovation (amongst other cases).  Of course, Girl Scout Cookie consumers need not fear Commission intervention because, at least under Section 5, the Girl Scouts will not also face private rights of action for treble damages all over the country, well, that is unless the plaintiffs bar figures out that it can use state consumer protection acts instead.   But that seems unlikely, right?  And really, the case for Commission action under Section 5 is fairly clear.   The welfare effects of price discrimination are notoriously difficult to measure empirically and, I mean, price discrimination sounds so bad doesn’t it?  This seems like the perfect case to rely on the Commission’s expertise in divining the anticompetitive effect imposed on consumers in the high demand regions and keep such a decision out of the hands of lay juries and generalist judges.  No doubt, the expertise will be required to interpret the “hot document” evidence like internal Girl Scout videos which teach the Scouts to sell more cookies and crush rivals with enthusiastic energy and persuasive sales techniques.  Antitrust experts are split on whether the scheme would also violate Section 2, but there is widespread consensus that a rumored sale of the Girl Scout Cookie business to a pharmaceutical firm would certainly violate Section 7.

From a library bookshelf in Kiev, Ukraine:

Russ Roberts’ brilliant and eagerly-awaited Keynes vs. Hayek rap video is here.  It’s the best economics pop music since Merle Hazzard.  Here are the lyrics:

We’ve been going back and forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No… it’s the animal spirits

[Keynes Sings:]

John Maynard Keynes, wrote the book on modern macro
The man you need when the economy’s off track, [whoa]
Depression, recession now your question’s in session
Have a seat and I’ll school you in one simple lesson

BOOM, 1929 the big crash
We didn’t bounce back—economy’s in the trash
Persistent unemployment, the result of sticky wages
Waiting for recovery? Seriously? That’s outrageous!

I had a real plan any fool can understand
The advice, real simple—boost aggregate demand!
C, I, G, all together gets to Y
Make sure the total’s growing, watch the economy fly

We’ve been going back and forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No… it’s the animal spirits

You see it’s all about spending, hear the register cha-ching
Circular flow, the dough is everything
So if that flow is getting low, doesn’t matter the reason
We need more government spending, now it’s stimulus season

So forget about saving, get it straight out of your head
Like I said, in the long run—we’re all dead
Savings is destruction, that’s the paradox of thrift
Don’t keep money in your pocket, or that growth will never lift…

because…

Business is driven by the animal spirits
The bull and the bear, and there’s reason to fear its
Effects on capital investment, income and growth
That’s why the state should fill the gap with stimulus both…

The monetary and the fiscal, they’re equally correct
Public works, digging ditches, war has the same effect
Even a broken window helps the glass man have some wealth
The multiplier driving higher the economy’s health

And if the Central Bank’s interest rate policy tanks
A liquidity trap, that new money’s stuck in the banks!
Deficits could be the cure, you been looking for
Let the spending soar, now that you know the score

My General Theory’s made quite an impression
[a revolution] I transformed the econ profession
You know me, modesty, still I’m taking a bow
Say it loud, say it proud, we’re all Keynesians now

We’ve been goin’ back n forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Keynes] I made my case, Freddie H
Listen up , Can you hear it?

Hayek sings:

I’ll begin in broad strokes, just like my friend Keynes
His theory conceals the mechanics of change,
That simple equation, too much aggregation
Ignores human action and motivation

And yet it continues as a justification
For bailouts and payoffs by pols with machinations
You provide them with cover to sell us a free lunch
Then all that we’re left with is debt, and a bunch

If you’re living high on that cheap credit hog
Don’t look for cure from the hair of the dog
Real savings come first if you want to invest
The market coordinates time with interest

Your focus on spending is pushing on thread
In the long run, my friend, it’s your theory that’s dead
So sorry there, buddy, if that sounds like invective
Prepared to get schooled in my Austrian perspective

We’ve been going back and forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No… it’s the animal spirits

The place you should study isn’t the bust
It’s the boom that should make you feel leery, that’s the thrust
Of my theory, the capital structure is key.
Malinvestments wreck the economy

The boom gets started with an expansion of credit
The Fed sets rates low, are you starting to get it?
That new money is confused for real loanable funds
But it’s just inflation that’s driving the ones

Who invest in new projects like housing construction
The boom plants the seeds for its future destruction
The savings aren’t real, consumption’s up too
And the grasping for resources reveals there’s too few

So the boom turns to bust as the interest rates rise
With the costs of production, price signals were lies
The boom was a binge that’s a matter of fact
Now its devalued capital that makes up the slack.

Whether it’s the late twenties or two thousand and five
Booming bad investments, seems like they’d thrive
You must save to invest, don’t use the printing press
Or a bust will surely follow, an economy depressed

Your so-called “stimulus” will make things even worse
It’s just more of the same, more incentives perversed
And that credit crunch ain’t a liquidity trap
Just a broke banking system, I’m done, that’s a wrap.

We’ve been goin’ back n forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No it’s the animal spirits

Law professors confess, at least when their own money is at stake, that demand curves slope downward.

Danny Sokol posted his blog’s list of top antitrust publications for the year.  The big winners were Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009), and Nathan Miller, Strategic Leniency and Cartel Enforcement, American Economic Review.  In the holiday rush,  I forget to send in my votes.  Sorry about that Danny.  With the normal caveats that I’m sure I’m leaving off some articles I’m just forgetting about at the moment, that the list is entirely subjective, and that the methodological sophistication of the list is essentially equivalent to trying to remember articles and find links while counting with my fingers, here are my top 10 for 2009:

1. William Kovacic, The Federal Trade Commission at 100: Into Our Second Century (Jan 2009)
2. Nathan Miller, Strategic Leniency and Cartel Enforcement, American Economic Review, Vol 99, No. 3 (2009), 750-568
3. Benjamin Klein, Competitive Resale Price Maintenance in the Absence of Free-Riding (forthcoming, Antitrust Law Journal)
4. Paul Seabright, The Undead? A Comment on Professor Elhauge’s Paper,  5 (2) Competition Policy International 277 (2009)
5. Bruce Kobayashi and Joshua D. Wright, Federalism, Substantive Preemption, and the Limits of Antitrust: An Application to Patent Holdup, 5 Journal of Competition Law and Economics 469 (2009).
6. Dennis Carlton, Why We Need To Measure the Effect of Merger Policy and How to Do It, 5(1) Competition Policy International 77 (2009)
7. Thomas Lambert, Dr. Miles is Dead. Now What?: Structuring a Rule of Reason for Minimum Resale Price Maintenance, 50 WILLIAM AND MARY LAW REVIEW 1937 (2009).
8. Daniel A. Crane, Chicago, Post-Chicago and Neo-Chicago, 76 University of Chicago Law Review (2009)
9. William Page and Seldon J. Childers, Measuring Compliance with Compulsory Licensing Remedies in the American Microsoft Case, 76 ANTITRUST L.J. 239 (2009)
10. Alan Devlin, The Stochastic Relationship between Patents and Antitrust, 5(1) Journal of Competition Law and Economics 75 (2009).

Chairman Kovacic’s FTC at 100 Report (all 200 or so pages) is not traditional academic scholarship as such, but is a must read material for anybody who does serious thinking about antitrust institutions and enforcement a legal or economic perspective and so I wanted to call some attention to it here.

What have I left off?

And if I don’t hear from you before then, Happy New Year!

President Barack Obama, June 1, 2009:

What we are not doing, what I have no interest in doing, is running GM. GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality. They, and not the government, will call the shots and make the decisions about how to turn this company around. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.

Wall Street Journal News Headline, December 22, 2009: In Risky Move, GM to Run Plants Around Clock. Obama Auto Team Urged the Change; Experts Say Maintenance, Restocking Could Cut Into Efficiency.

(Parts I and II of our Rhetoric Versus Reality series are available here and here.)

Hilarious video from reason.tv.

(HT: Luke Froeb)

I have no intention of wading into the debate over the climate change chapter in Superfreakonomics.  I’m sure you all know the controversy:  Levitt and Dubner had the temerity to suggest that global warming was a huge problem, that we should look hard for really expensive solutions, and we need to do something.  And the outcry was from . . . the global warming alarmists. Curious.

Anyway, Brad DeLong has been among the most vocal and strident (Brad? Strident? Naaaaaaaah) critics of the book.  And one of Brad’s criticisms–couched in terms of “why are other people such idiots when I am so smart?”–appears on Yoram Bauman’s website in response to Yoram’s own critique of the book.  Here’s the main gist of Brad’s comment:

Yoram Bauman: “I have just seen a PDF of the Superfreakonomics chapter on climate change, and it makes basic mistakes when it says things like “When Al Gore urges the citizenry to sacrifice… the agnostics grumble that human activity accounts for just 2 percent of global carbon-dioxide emissions, with the remainder generated by natural processes like plant decay.”… [Y]es, human generation of CO2 is dwarfed by natural processes like plant decay. But it also shows that natural processes balance each other out…. What you’re left with is a completely plausible story in which human activity slowly increases atmospheric concentrations of CO2 from pre-industrial concentrations of about 285ppm (parts per million) to current concentrations of about 385ppm that are going up by about 2ppm per year. This sort of misleading skepticism exists throughout the chapter, and it does a disservice to climate science, to economists like me who work on climate change, to academic work in general, and to the general public that will have to live with the impacts of climate policy down the road…”

Steven Levitt: “I don’t understand…. Why does it matter if natural processes are in balance or not? CO2 is CO2! The source doesn’t matter. If we could cut CO2 emissions a little bit overall, whether through natural sources or others, the effect would be the same. It is not saying that cutting human emissions isn’t the right way to do it, but it is a surprising fact and one worth mentioning…”

Levitt and Dubner are saying that the fact that only 2% of emissions are of human origin is in some sense relevant to and supports the “agnostic” case on global warming. That is grossly, grossly misleading–talking about flows when the relevant variables are the stocks.

Actually, Brad, if you are talking about cutting emissions–i.e., FLOWS–it is perfectly appropriate to talk about where the biggest flows are coming from.  As far as I know, the point of the chapter is to be agnostic about where the solutions are to be found, not necessarily about the cause.  And, frankly, I’m not sure why the historical cause would matter if the only way to reverse the problem is to cut flows or to reduce stocks (and from whence the stocks came is hardly relevant, unless their origin tells you something about how to reduce them, and I don’t think this is true).  So, essentially, Brad has it, as I see it, exactly backward.  But bravo to Brad for having the courage of his convictions to be utterly insulting to others while being so utterly wrong.

UPDATE:  Brad makes the same point even more stridently (and equally wrongly) on his blog.

Professor Bainbridge reports. Hmmm….Possible market power, deceptive conduct, and increase in prices?

Just saying.

Rewarding loyal consumers with a product they can really believe in:

“I am proud today to introduce to those who really, truly deserve it, our most incredible iPhone yet,” announced Apple CEO Steve Jobs, extending his seemingly empty left palm toward the eagerly awaiting crowd. “Not only is this our lightest and slimmest model ever, but as any truly savvy Apple customer can clearly see, it’s also the most handsome product we’ve ever designed.”

The packed auditorium, which had been listening to Jobs in hushed reverence for several minutes, then erupted into applause, with hundreds of men and women suddenly jumping to their feet and shouting, “I can see it!” “Look, there it is!” and “God, it’s so beautiful!”

Steve Jobs unveils the updated iPhone exclusively to those who really, really want to see it.

Screams of “Of course, yes, I too can see the phone,” were also heard at this time.

Retailing for $599, the iPhone 3GI offers only the most special Apple consumers—the ones who believe in the company more than anything else in the world, and who would never, ever dream of questioning it—the ability to open dozens of powerful applications at once. In addition, the new multimedia device will provide true Apple fans with a high-definition video camera, one-tap editing with Final Cut Pro, and cut and paste.

…

“The selection of colors is amazing,” said Paul Conrad, a Fairfield, VA native who purchased phones in black, white, and silver. “Not only does it look awesome, but it can do pretty much anything you want as long as you believe in it.”

“The AppleCare Plan doesn’t cover dropping your phone, though, so I’d recommend buying one of these designer protective cases,” Conrad added.

While the new iPhone has been greatly admired and widely touted for its impressive voice and data communication capabilities, some Americans remain skeptical.

“Daddy isn’t talking into anything at all,” said 4-year-old Ella Conrad, pointing at her father, Paul, who has been obsessively staring at, playing with, and customizing the invisible phone since purchasing it Monday. “Daddy’s pretending to be on hold with an operator.”

You heard it here first.

My colleague Ilya Somin insightfully defends against allegations of the death of Moneyball in baseball and legal academia — largely making the point that larger institutions with larger payrolls imitating the successful elements of the strategy.  There is more there, so go read the whole thing as well as an interesting comment thread.  Ilya points out the following non-exhaustive list of GMU strategies on the hiring market aimed at acquiring undervalued assets: (1) L&E scholars, (2) conservative and libertarian academics; (3) academics with strong publication records but otherwise inferior traditional academic credentials.  Ilya correctly notes that L&E scholars are no longer generally undervalued in legal academia (he also asserts that ideological discrimination and credential fetishization are less than ten years ago — a view that contradicts my own prior somewhat — but I want to focus on the L & E point).

So, if GMU’s rise coincided with the rise of L&E in legal academy in the days of Henry Manne, but L&E scholars are no longer undervalued i the job market, what’s in store for GMU in the future?  Will it, as an institution, be able to continue to attract the talent that has led to its success in faculty quality studies such as this?  I know more about the L&E based legal academic job market than I do about either baseball or ideological discrimination at the institutional level so I want to add a few new points to the mix leveraging my thinking about the future of law and economics more generally into some observations about GMU’s future.

First, its important to note that L&E itself has changed.  L&E is no longer a “conservative/libertarian” discipline, as is often assumed by its discussants outside the discipline.  As I’ve discussed, among those with PhDs, the increasing mathematical formality of the economics discipline has produced a new generation of L&E scholars that are either serious modelers and theoreticians whose pay off comes largely for making marginal contributions to the sophisticated and elegance of the pre-existing literature than for the ideological policy leanings of the models or they are econometricians.  In antitrust economics, for example, the bulk of “new” scholarship in the last several decades has been a few standard deviations to the political “left” (in terms of supporting intervention) than the scholarship of the 60s and 70s.  In either case, the newly minted L&E scholars with PhD’s are ideologically all over the map.  Further, the changes in economic science itself also include the proliferation of behavioral economics — which is inherently to the ideological left of traditional L&E.  This is one reason that I’m skeptical about claims that there is less ideological discrimination than a decade ago.  To the extent that there is less “discrimination” against L&E scholars now than ten years ago, it is generally because they are either doing behavioral law and economics, theoretical modeling with interventionist policy implications, or in some cases, econometricians who are seen as ideologically neutral.

Second, will GMU continue its success in hiring high quality L&E scholars (including those with PhDs)?  I think so largely because that I am a firm believer that there remain plenty of undervalued assets in the L&E hiring market.  There are plenty of reasons for this belief.  One is that I do not believe most law schools have the institutional capability to review the work of the new L&E scholars doing highly formal modeling or theoretical econometrics.  Further, most of the top L&E scholars coming out of “name” institutions like Harvard, MIT, Chicago, Yale, Berkeley, Stanford, and elsewhere are doing work that requires significant mathematical skills to evaluate.  Under these conditions, institutions rely relatively more heavily on other quality signals: name of degree granting institution, reputation of advisors, etc.  While these metrics might be very good predictors of success in economics as a discipline, they do not necessarily predict success in L&E which has at its core retail and policy elements that are largely absent from economics.

I predict that most top law schools wanting to make an L&E hire will frequently and increasingly: (1) make hires consistent with ideological priors, and (2) rely on quality signals that are correlated with rank of degree granting institution and recommenders rather than how well the work is likely to translate into contributions to the L&E discipline.  There are a few implications of that analysis.  One is that its pretty likely GMU is not going to continue its success in this area by hiring Harvard / MIT JD/PhDs or behavioral economists (and probably theoreticians in general).   Another is that the undervalued assets are likely to be in corners and disciplines of the L&E field that do not necessarily correlate with the ideological priors of the legal academy in general or areas in vogue in economic science BUT that provide methods that are and have proven to be especially fruitful in L&E.

An obvious example is public choice economics.  Top economists focusing on public choice economics are not generally these days coming from top 10 “ranked” economics departments.   They are concentrated in a few places within departments that are especially strong in that area — but do not attract attention of the top law schools either for methodological, credential or ideological reasons. The discipline itself inherently offers policy relevant insights for L&E.   There are other areas (economic history comes to mind) that fit this profile.  But the more general point is that the metrics being used to evaluate top economists are the same as those used by the top law schools to evaluate talent, but not necessarily the same as predicting success in L&E.  So it is important for schools like GMU to spend the time searching for undervalued assets (hey, nobody said Moneyball was easy) and finding the candidates in “other” departments that do have the skills, interest in policy-relevant L&E, and creativity to generate an execute a fruitful L&E research agenda.  One bit of good news for GMU is that one source of comparative its advantage is that it does have a sufficient number of L&E scholars on its faculty to evaluate potential candidates internally without relying on noisy and more unreliable signals.  A second reason for optimism is that GMU as an institution has a history of success in finding undervalued assets.

While the search has become more difficult to find them in L&E — one can no longer just wait for the top schools to pass on the top candidates — they’re still out there.  If you know of one — or are one — send me an email!

President Obama in yesterday’s speech on fiscal responsibility:

The reckless fiscal policies of the past have left us in a very deep hole. And digging our way out of it will take time, patience, and some tough choices.