Famous, yes

In the short time that I have been working for Don Nichols, work that I have done for him has been featured in the New York Times, in a speech by Governor Doyle, and in various other newspapers. Work that I've done for him has also been sent to a Congressional Committee as well as distributed to a Urban Economics class. Clearly having my work distributed to the Urban Econ class is the highlight of it all as well as the clincher that I am indeed anonymously famous.

Oh no they didn't

If, on October 8, I don't get to watch the Texas-Oklahoma game on my television in the upper midwest I will be an unhappy man. Currently it looks like ABC is planning on showing those of us in the Great Lake states Minnesota and Michigan while the rest of the country gets the game in the Cotton Bowl. That's crap. I don't want to see a boring Bid Ten + one game. I'm especially upset because Texas has a great show of ending their little streak against OU. The crazy thing about Texas is that this isn't their best team of the past few years. The 2001 team may have been the most talented college football team of this decade, or at least comparable to last years USC team. If only they'd started Major.

Bad Omen

I'm quite successfully procrastinating tonight. The problem is that I have to write a two page memo. What kind of jackass tries to avoid doing such a simple assignment? This does not bode well for when I have real papers to write. At least my breathe-rite strip is keeping me comfortable.

In other news, all of my relatives in the Golden Triangle and Key West seem to be doing just fine.

Good luck, Orange

Every summer and most every winter of my life I spent several weeks visiting my grandmother and great grandmother in Orange, TX. When I started college and moved to Austin, I added in an additional fall and spring visit just because I could. I love that place. There is nothing particularly delightful about the Golden Triangle. It's an incredibly poor, ugly, refining area. There's great food, but that seems to be the case anywhere there is a high concentration of poverty. Mostly I associate that part of the country with everything that I think is good about me as a person. My Granny and Grandma, Ginger and Sandy, and the rest of my relatives down there showed me how to be a good, caring person. I'm not sure I would have been interested in policy, particularly poverty alleviation if it weren't for the time I spent in Orange. I was disturbed today to get an email from my Aunt telling me that the Golden Triangle; Orange, Port Arthur, and Beaumont; is the most at risk location for a hurricane. Virginia and Sandy actually evacuated. My dad doesn't think he ever evacuated for a hurricane. When my relatives start evacuating, it becomes something to worry about. I'm just hoping that this incredibly poor, predominantly African-American part of the country can be spared what's happened in other parts of the gulf.

More about gas

I've heard a bit from liberal type folks who don't seem to be upset or concerned about the recent bit of price gouging by the gas companies. In fact, I've heard many people who are pleased that the price has gone up, convinced that the higher price will induce people to seek alternative modes of transportation or in general consume less gasoline. This is not the case. With a short term price shock such as this you shouldn't expect to see any decrease in demand as a result of the price increase. The fact is that the elasticity of demand for gasoline is very low in the short term. High prices for an extended period of time will likely result in some changed behavior, but a minor interruption of national refining capabilities will not result in long-term higher prices. If the goal is to reduce consumption then a gas tax would be the way to go. That tax could fund public transportation and other innovations to make energy use more efficient. As it stands, increased case prices are unambiguously bad for our economy. They lower our standard of living. They make other goods more expensive as a result of increased transportation costs. In short, if your state has laws related to gas price gouging then perhaps your state should be investigating legal recourse. This is not good behavior from the gas companies.

On what grounds?

I read today that Governor Doyle is considering joining other states in a lawsuit against the gas companies for gas gouging after Hurricane Katrina. Is he claiming collusion? There is no gas gouging law in Wisconsin. The only relevant statute that I can think of is a limit to one price increase per day. Perhaps that law was violated and that's another issue. I just don't quite understand how one sues for breaking no law.

That said, it is quite clear that the Governor is correct and gouging did occur and is still occurring today. The historical average markup between a gallon of crude and a gallon of gasoline is $0.80 to $0.90. Of that, approximately $0.50 is made up of taxes with the rest representing profit and refining costs. The day that the hurricane hit, the markup jumped to approximately $1.50 a gallon. Assuming that taxes are still $0.50 then that leaves $1.00 or so for profit and refining. The hurricane only took out between 10 and 15% of our refining capabilities which indicates a total markup of $1.00 should be expected as a result of the hurricane. I'm confident that these are the numbers that Governor Doyle is using because I compiled, and Don Nichols presented the presentation that he has cited as the basis for his concern.

A warm welcome

Those of you familiar with the premature end of Kevin C's blog will be glad to know that he is now on the Mr. Brendon team. Offer him your gifts.

I am an econ nerd

Today I had to pay a $20 deposit for my key to my PA office. I share this office with probably 10 or more people. I had my choice of paying in cash or with a check and I chose to use a check for a very specific reason. By taking into account the discount rate of my $20 and assuming that I would get my deposit back I came to the conclusion that the never-to-be-cashed check holds a higher net present value than the $20 bill that would be returned in 8 months time. This is also why I oppose estimated taxes as someone who expects a full refund.

My Wife has talent

Meredith auditioned for and made the Madison Opera Chorus today. This means that she is now a paid, professional singer once more.

Favorite Places

This is just a list of my favorite cities in the US. I'm trying to figure out, based on my preferences, where I should be applying for jobs after graduation. This is my top ten in order.

Austin
New Orleans
Tampa
Atlanta
San Diego
Chicago
San Antonio
New York City
Chatanooga
Minneapolis

I am old

Really I'm just 27, but it seems old in an abstract way. My rule is that you're only old if the second number is bigger than your first. By this standard, I am quite old.

A policy alternative

This is something that I've been thinking about for a while and the events in the Gulf of Mexico have made me think about it more seriously of late. I think that there should be a federal property tax which funds homeowner and renters insurance. I don't want to discuss all of the complications associated with implementing such a policy at this time, but I will provide a few details. First, the tax rate would be slightly higher in areas of higher risk for catastrophic damage. One of the benefits of variable pricing is that the higher rate in one locality may deter some from moving to those high risk areas. Second, this new tax would be accompanied by a generous and refundable tax credit for low-income renters and homeowners. In addition to funding insurance, this tax could be spent on things that would be justified as prevention activities such as low-cost mass public transportation. While this would probably be unpopular and hell to administrate, it is clear that the status quo leaves a very large portion of the population to bear a much larger share of the risk of natural disasters.

Call it a tithe

Any people who make a monthly ten percent donation to their churches should donate that money directly to the aid provider of their choice, preferably the Red Cross, but also to the group affiliated with their church.

Those generous NFL players

Don't get me wrong, I think that Warrick Dunn is probably one of the best people to have played professional sports in a very long time. I respect his goal to get every player in the NFL to make a donation of $5,000 to the hurricane relief effort. But when you do the math, you will find that he is asking the players to donate 0.16% of their income. The average income in the NFL is $3 million.

UPDATE: The Manning brothers are apparently quite active in the recovery operations going on right now in New Orleans.

Letterman

If you can handle watching Letterman tonight you will be rewarded with musical guest Spoon.

The Gulf

I'm sitting here in my apartment thinking about the gulf coast, particularly the delta region, and I'm wondering what can I do to help. Giving money is one thing. Everyone who can afford to give should give. Frankly, most people in this country can afford to give. The University of Texas is helping in an interesting way. They're allowing any students from schools adversely affected by the hurricane to attend classes in Austin for at least the fall semester. I don't know where they would put those people. I suppose the University can house people in any number of the fancy new apartment complexes in town. But that's an institution of higher learning with incredible funding and a great ability to do good. It just seems to me that there should be something that I, a southerner attending a top-flight public policy school, could or should be doing to help out. If anybody can think of what that might be, please let me know.